Can Australian Interest Rates Fall Further

Invast Investment Committee

Invast Financial Services

Can Australian Interest Rates Fall Further? This is a key question in the allocation of capital across portfolios for investors. The Reserve Bank of Australia (RBA) to us is sounding fairly conservative and even slightly worried about the pace of economic activity. Interest rates might be a historically low levels but there is definitely a possibility of them falling further. House prices are an economic issue but not necessarily the RBA's problem. The RBA's primary and mandated purpose is to target inflation between 2-3%. All other issues are secondary. We don't generally over analyse the monthly RBA statement, at best we give it a quick read and see if there are any key takeaways. Usually, the statement reads the same month to month with the odd addition or deletion. What stood out this month was the concise nature of the statement and direct references to a slowing Asian region, with uncertainty in China prevailing. Read our full note here: (VIEW LINK)


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