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Shadow Reserve Bank

Analysis and Comment (17)

Australia’s economy is showing promising signs, with global events the main source of concern. Australia’s economy is showing promising signs, with global events the main source of concern. AAP

Promise on the horizon for Australian economy

The Australian economy appears to be benefiting from the current expansionary stance in monetary policy, despite uncertainties in the global economy. The CAMA Shadow Board is 71% confident that the cash…
Rising unemployment is likely to be a factor in future interest rate movements. Rising unemployment is likely to be a factor in future interest rate movements. AAP Image/Joe Castro

Spectre of rising unemployment to weigh on rates decision

The key question for interest rates this month is whether improving domestic demand will curb the increasing rate of unemployment and underemployment, or whether labour market weakness will persist. The…
Australia’s economic position remains uncertain, which may prompt the Reserve Bank to hold interest rates. Australia’s economic position remains uncertain, which may prompt the Reserve Bank to hold interest rates. AAP

Waiting game on economy means RBA should hold

Without a clear direction of where the Australian economy is heading, the consensus to keep the cash rate at its current level of 2.5% remains strong. Uncertainties surrounding the domestic and foreign…
Data suggests a tentative economic improvement. Data suggests a tentative economic improvement. Image sourced from www.shutterstock.com

Has the Australian economy turned the corner?

The balance of risks to Australia’s economy has barely shifted from last month, so that the consensus to keep the cash rate at its current level of 2.5% remains strong, according to Reserve Bank Shadow…
Over the next twelve months, the Shadow Board members attach a 40% probability that the cash rate will need to increase, slightly more than the probability that the cash rate needs to fall. Over the next twelve months, the Shadow Board members attach a 40% probability that the cash rate will need to increase, slightly more than the probability that the cash rate needs to fall. AAP

Boost growth, or counter a weaker dollar - which way should the RBA go?

Whither the Aussie dollar? Since the RBA dropped the cash rate to 2.75% last month the Australian dollar has fallen to below 96 US cents, a depreciation of more than 7% against the US dollar. With weaker…
Down? Stay as it is? Commentators are divided about the direction of the cash rate. Down? Stay as it is? Commentators are divided about the direction of the cash rate. Image sourced from www.shutterstock.com

Stay the course with interest rates: shadow board

The Reserve Bank of Australia should leave interest rates unchanged this month according to the consensus of Shadow Reserve Board members. Amid market uncertainty over whether the RBA board may choose…
Despite continuing unrest in Europe - particularly Cyprus - the global economy has firmed, say Shadow Reserve Bank commentators. Despite continuing unrest in Europe - particularly Cyprus - the global economy has firmed, say Shadow Reserve Bank commentators.

RBA: rates should hold, with a gradual return to neutral

The consensus of the nine members of the Shadow Board is that the Reserve Bank of Australia should leave interest rates unchanged from March at 3.00%. But the balance of risks implies rates should rise…
A number of Shadow Bank commentators point to a slight uplift in the housing market as a sign that interest rates should rise in the medium term. A number of Shadow Bank commentators point to a slight uplift in the housing market as a sign that interest rates should rise in the medium term.

Interest rates should stay on hold, for now

No change remains the consensus of the nine members of the Shadow Board in the Reserve Bank of Australia holding interest rates unchanged from February at 3.00%. But rates need to rise significantly within…
A blunt instrument: the case for interest rates to rise is strengthened by rising unemployment and a persistently high Australian dollar which has defied previous cuts. A blunt instrument: the case for interest rates to rise is strengthened by rising unemployment and a persistently high Australian dollar which has defied previous cuts. AAP

Rate cut unlikely, but the forward path for interest rates will be up

The Shadow Reserve Board, an initiative of the Centre for Applied Macroeconomic Analysis (CAMA) made up of eminent industry and academic economists, returns this month. Reserve Bank of Australia board…
A cut in Australia’s cash rate tomorrow has been factored in by most economic practitioners, but Shadow Board academics are split over whether it should. A cut in Australia’s cash rate tomorrow has been factored in by most economic practitioners, but Shadow Board academics are split over whether it should. AAP

Academics v practitioners: split views within the Shadow Board

Many economists think the RBA Board will cut the cash rate this month. With commodity prices projected to be weakening, financial markets suggest a rate cut is likely. Mind you, many practitioners suggested…
The CAMA Shadow Board believes the Reserve Bank of Australia should leave the cash rate unaltered. The CAMA Shadow Board believes the Reserve Bank of Australia should leave the cash rate unaltered. AAP

Interest rates should stay put

The Reserve Bank of Australia should leave the cash rate unchanged tomorrow, with little evidence suggesting an interest rate cut is justified, according to members of the CAMA Shadow Board. The Shadow…
Warning signals about global slowing have been there for some time - yesterday’s cash rate cut should not have been a surprise. Warning signals about global slowing have been there for some time - yesterday’s cash rate cut should not have been a surprise.

RBA’s rate cut was a matter of ‘when’ not ‘if’ - and there’s no need to panic

Monetary policy must be forward looking. It has limited ability to affect the here and now of the economy, as this has largely already been determined - by employment decisions, investment decisions and…
There are as many compelling reasons for the Reserve Bank to cut interest rates as there are to leave them unchanged. There are as many compelling reasons for the Reserve Bank to cut interest rates as there are to leave them unchanged. AAP

RBA should hold steady on interest rates — but when should it cut?

Predicting the Reserve Bank’s interest rate decision for October appears to be particularly tough for economic commentators. A decline in iron ore prices, compounded with a stubbornly high dollar, has…
The Reserve Bank of Australia is expected to keep the cash rates unchanged tomorrow: but prominent economists say the case for a cut may be firming. The Reserve Bank of Australia is expected to keep the cash rates unchanged tomorrow: but prominent economists say the case for a cut may be firming. AAP

Hold ‘em: but case for interest rate cut strengthens

CAMA’s Shadow Board, which gives its views ahead of the decision by the Reserve Bank of Australia, continues to support the current setting of the cash rate at 3.5%. But economists are seeing a greater…
The reserve bank should hold the cash rate steady tomorrow – but CAMA’s Shadow board members see greater uncertainty long term. The reserve bank should hold the cash rate steady tomorrow – but CAMA’s Shadow board members see greater uncertainty long term. AAP

RBA should hold rates, but longer term uncertain

The Conversation, in conjunction with the Centre for Applied Macroeconomic Analysis (CAMA), presents the monthly findings of the Shadow Board, prior to the meeting of the Reserve Bank of Australia Board…
The Reserve Bank of Australia should keep interest rates on hold, say a group of influential economists. The Reserve Bank of Australia should keep interest rates on hold, say a group of influential economists. AAP

Keep rates on hold, says CAMA shadow board

The Conversation, in conjunction with the Centre for Applied Macroeconomic Analysis (CAMA), will present the monthly findings of the Shadow Board, a day before the Reserve Bank of Australia Board meets…
Reserve Bank of Australia Governor Glenn Stevens: knowing how individuals board members think is important. Reserve Bank of Australia Governor Glenn Stevens: knowing how individuals board members think is important. AAP

Shadowing the RBA: uncertainty matters when it comes to interest rates

Monetary policymaking is imperfect. When board members of a central bank such as the Reserve Bank of Australia sit down to set the appropriate target cash rate each month - as they did this week - there…