Outcome: November 2019

No comment.

No comment.

If ten years ago you'd have told me that Donald Trump would be President and calling the shots to the Fed with regard to monetary policy, and that our cash rate would be 0.75% while the unemployment rate was below 6% I would have eaten my hat (or walked to Canberra). The difficulty this poses for the RBA is the international and exchange rate pressures that this puts on Australia. However, it is still the case that further rates cuts will have zero to minimal impact on the economy. 

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No change recommended. Conventional and unconventional monetary policy should be reserved for a response to a future acute crisis. Further cuts in the cash rate will do little to fix the key longer-term macroeconomic issue—the chronic decline in productivity growth—instead stronger fiscal policy measures and microeconomic reform are needed.