By Shane Oliver, Head of Investment Strategy & Chief Economist from Oliver’s Insights, AMP Capital, 04 June 2019
In Shane Oliver’s latest article he looks at the RBA cut to rates to a new record low – Why? Will it work? How low will rates go? What does it mean for investors?
- The RBA’s latest rate cut is aimed at heading off a further slowing in growth which would threaten higher unemployment and lower for longer inflation.
- Cutting the inflation target would be a big mistake.
- More rate cuts are likely to be needed ultimately taking the cash rate to a low of 0.5% next year. Ideally this will be combined with more fiscal stimulus.
- For investors it means low interest rates for even longer.