Yes. Dr Phillip Lowe did as he promised last week in Armidale. Our third rate cut this year. Here is what the official statement said.
“At its meeting today, the Board decided to LOWER the cash rate by 25 basis points to 0.75 per cent…
“inflation remains LOWE…
“Interest rates are very LOWE around the world and further monetary easing is widely expected, as central banks respond to the persistent downside risks to the global economy and subdued inflation…
“Long-term government bond yields are around record LOWES in many countries, including Australia…
“Borrowing rates for both businesses and households are also at historically LOWE levels…
“The Australian dollar is at its LOWEST level of recent times…
“It is reasonable to expect that an extended period of LOWE interest rates will be required in Australia to reach full employment and achieve the inflation target.”
Peter Costello called it a few days ago…
Asked, what will a rate cut do for the economy?
“Not much. All those people who were holding off spending, borrowing… investing at 1%pa. Are they going to suddenly change their minds at 0.75%? I don’t think so.”
Economics 101: The Law of Diminishing returns. Diminishing Returns are already Lowe
I hope at the cafe in the photo above Pete is telling Josh the same message as Phil.
Economics 101. Keynes v Freedman
Josh. It’s not monetary any more, its fiscal.
For Phil’s Sake, Josh….time to take our balance sheet for a spin.
Tony Bates
Senior Wealth Advisor
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