RBA Governor Lowe says Delta outbreak has delayed, not derailed economic recovery

Reserve Bank of Australia Governor Lowe , topic is Delta, the Economy and Monetary Policy

  •  at the ANIKA Foundation (online event)

 Headlines via Reuters 

Lowe says Delta outbreak has delayed, not derailed economic recovery

  • reiterates cash rate unlikely to rise before 2024 given sluggish wage
    growth
  • says “difficult
    to understand” why markets pricing in hikes for 2022 and 2023
  • says rates might
    rise in other countries but domestic factors different
  • says board judged
    fiscal policy best response to current delta lockdowns
  • little monetary
    policy could do to offset hit to demand in Q3 and Q4
  • says extension in
    bond buying to Feb reflected delayed recovery
  • says the outbreak is a
    significant setback, an added element of uncertainty
  • Q3 GDP likely to
    shrink by at least 2%, risk contraction could be significantly larger
  • unemployment rate
    could reach “high fives” pct, hours worked fall 3-4% in Q3
  • expects economy to
    be growing again in Q4, recovery continuing into 2022
  • spending to be
    supported by higher savings, boost to household wealth from house
    prices
  • says low interest
    rates contributing to higher house prices
  • housing
    affordability best not addressed by higher rates or curbs on lending
  • says Australia has
    made significant progress on the vaccination front
  • main downside risks
    are new delta outbreaks, new strains of virus

Bolding above is mine, that’s a key takeaway. Nothing new, but Lowe has emphasised 2024 yet again. AUD/USD has lost a few points, not a lot. From circa 0.7370 to around 0.7360 as I update. 

There is going to be Q&A following, stay tuned!

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Reserve Bank of Australia Governor Lowe , topic is Delta, the Economy and Monetary Policy

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