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RBA’s Lowe Speaking After the Overnight Rate Cut

Posted Tuesday, October 1, 2019 by
Skerdian Meta • 1 min read

Lowe is trying to sound positive

The Reserve Bank of Australia (RBA) cut interest rates early this morning in the Asian session. This was the third rate cut in the last four meetings. Markets were anticipating this move, but it did have a decent impact on the AUD, sending AUD/USD around 70 pips lower. It also dragged the NZD down with it too.

The RBA should have held a press conference after today’s meeting, but they have left it to Chairman Lowe to deliver brief remarks at the RBA Board Dinner, in Melbourne. Below are Lowe’s comments:

Progress on employment and inflation goals is slower than they would have liked it
But today’s rate cut should help with those goals
He repeated that the economy is at a gentle turning point
Makes a large name of general banking lending comments
Nearly 4% of borrowers have loan balance exceeding property value
Lowe recognizes that monetary policy still works to support employment, income and growth

He is repeating again that the economy is at a turning point but I still don’t see it. The global economy has slowed down considerably and it is still weakening, the trade war is at its height, and the Australian economy is softening as well. This morning before the RBA meeting, the building approvals posted the fifth decline in the last six months.

So, it is going to take some time for the economy to get to the turning point and that will only come after a trade deal between China and the US is made. The Aussie confirms my scenario as it keeps sliding lower.

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