Vimal Gor: why I feel Australian official rates have further to fall

Pendal Group

Pendal Group

Vimal Gor: why I feel Australian official rates have further to fall. The supply side of the economy in sectors such as manufacturing has been seriously damaged. A weaker currency should eventually spur investment in these sectors and could possibly help to lift inflation in the future, but it's likely this effect is many years away and a substantial fall in the currency is needed first. For this to happen though the RBA needs to cut, and aggressively. March was a missed opportunity and this may result in a few more months of the AUD hovering around the 80c level, all for the comfort of seeing an inflation number in April that we already know isn't going to look good. In this environment Australia's 10-year bond yield and official interest rate could easily head below 1 percent - particularly if housing flatlines or begins to fall in Sydney and Melbourne. If the housing market also begins to fall, we have got a 50/ 50 chance of Australia heading into its first recession in over 20 years. Read more here (VIEW LINK)


Pendal Group
Pendal Group
Pendal Group

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