Original article by John Kehoe
The Australian Financial Review – Page: 2 : 21-Dec-19
Paul Brennan of Citigroup notes that the Reserve Bank of Australia’s average cumulative interest rate cut in the last four monetary policy easing cycles was three percentage points. With the cash rate already at a record low of 0.75 following three rate cuts since June, experts warn that the RBA has limited ‘firepower’ in the event of an economic downturn. RBA governor Philip Lowe has ruled out negative interest rates; while he is open to quantitative easing, his preference is for fiscal stimulus and structural reform.
RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY