Australian interest rates

Via FTAlpahville comes a VERY IMPORTANT post for Australia: This is a guest post by Leo Hindery, Jr, a member of the Council on Foreign Relations and formerly CEO of AT&T Broadband and its predecessor, Tele-Communications, Inc. (TCI).

Via our Chris today: Another week passes and yet another bank has upgraded its housing outlook in line with our heterodox March forecast for a zero to 5 per cent decline in the six months after the COVID-19 shock followed by 10 per cent to 20 per cent capital gains.

The Australian Bureau of Statistics has joined Australia’s War of Stupid.

More capital from the Aussie ponziteers: The Reserve Bank’s – Te Pūtea Matua – latest stress test of New Zealand’s banks illustrates the benefit and necessity of shoring up bank capital in the good times to provide resilience.

It’s just awful listening to the lunatically conservative RBA, via yesterday’s minutes: The US dollar had depreciated significantly against the currencies of other advanced economies over recent months, including the Australian dollar.

Via Banking Day: A significant shift in the framework of the Reserve Bank of Australia’s monetary policy is underway that could culminate into the Term Funding Facility becoming the effective instrument for implementing monetary policy and making the cash rate target almost redundant for the next few years.

If anything penetrates the thick skulls at the Lunatic RBA it might be the constant humiliation it receives at the hands of the RBNZ, a vastly superior central bank on every measure.

Last week was a seminal one for the Australian economy and investment outlook.

Cross-posted from FTAlphaville: From the June 2017 edition of The Economist: That central banks cannot endlessly reduce unemployment without sparking inflation is economic gospel.

Gareth Aird at CBA  sees change at the RBA: It’s very easy to miss little changes in the RBA’s communication.

Via the Lunatic this afternoon: At its meeting today, the Board decided to maintain the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.

The Reserve Bank Board meets next week and policy is certain to remain unchanged.

From Barclays: In the US, the resumption in activity has been brought about by the falling number of COVID cases and increasing mobility which bodes well for the outlook.

The annual Jackson Hole central banking swingers party is later this week.

Amusing stuff, via the ABC: Top brass at Australia’s central bank have hit back at ABC reporting that exposed how the dire view of the housing market held by some Reserve Bank staff clashed with the rosy picture the bank’s representatives presented in public.

John Edwards at The Lowy Institute: EXECUTIVE SUMMARY Australia is emerging from the pandemic sooner and at less economic cost than widely expected, but with higher unemployment and elevated debt.

Via Bloomie comes the eponymous Peter Tulip, ex-RBA: “The evidence suggests that negative interest rates work,” said Tulip, now chief economist at the Centre for Independent Studies — a think tank in Sydney.

In his own quiet and elegant way: Recently the Bank has communicated extensively with the market.

Via the excellent George Tharenou and Carlos  Cacho: Economic outlook deteriorated sharply, amid 2nd wave of COVID & restrictions With the 2nd wave of COVID seeing tighter mobility restrictions in Australia, including an extended ‘State of Disaster’ in Victoria, the economic outlook is deteriorating.

Via Westpac: In last week’s biannual parliamentary testimony before the House of Representatives Standing Committee on Economics, RBA Governor Lowe made some specific references important to the bond market.

Via Bill Evans at Westpac: Today Reserve Bank Governor Lowe made his biannual address to the House of Representatives Standing Committee on Economics.

From Westpac chief economist, Bill Evans: Today Reserve Bank Governor Lowe made his bi-annual address to the House of Representatives Standing Committee, Economics.

Here it is from Luci Ellis as she spruiks the new dart-throwing forecast: Closure of international borders to most movements of people is affecting Australia’s international trade and will continue to do so over the forecast period.

The new SoMP: During the first half of the year, the COVID-19 pandemic led to the most severe contraction in global and domestic economic activity in decades.