Inflation has barely been within the Governor Philip Lowe’s target band his entire time in office. Zero inflation means he should cut now, before the election.
Philip Lowe tells the Press Club on Wednesday there’s now an even-money chance rates will be cut.
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The Reserve Bank’s inflation target seems out of date in a world of ultra low inflation. So why is Governor Lowe persisting with it?
Things will continue to look good enough for long enough to help the government fight the election. Beyond that, the Conversation Economic Panel is worried.
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Peter Martin, Crawford School of Public Policy, Australian National University
The Conversation has assembled a forecasting team of 19 academic economists from 12 universities across six states. Together, they assign a 25% probability to a recession within two years.
We’re unpredictable, but this could be a one-off adjustment.
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It is thought that it doesn’t help much to cut official interest rates toward or beyond zero, and maybe it doesn’t, but new research suggests the answer has a lot to do with the housing market.
Environmental and health groups have called for the creation of a non-political federal agency with the power to rule on pollution levels - much like the Reserve Bank does for interest rates.
Inflation has been doggedly low, so it’s not clear that the 2.5% expectation for inflation is going to turn out to be right.
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This week’s strong growth in full-time employment shows a robust labour market. This only deepens the puzzle of why inflation is so low at the same time.
Pay rise? Why not, says the RBA governor.
Lukas Coch/AAP
Millie, aged 5, wants to know where money comes from. We asked an economist to explain.
Data from the Australian Prudential Regulation Authority (APRA) reveals the average balance on housing loans has barely trended upwards over the last five years.
Tracey Nearmy/AAP
Attacks on the South African Reserve Bank and events in India that led to the exit of the governor of the country’s central bank are a warning that banks aren’t immune from political meddling.
South Africa’s former finance minister Pravin Gordhan chats with Lesetja Kganyago, governor of the country’s Reserve Bank.
Reuters/Siphiwe Sibeko
Distinguished Professor of Economics and Public Policy, ANU Centre for Applied Macroeconomic Analysis (CAMA), Crawford School of Public Policy, Australian National University