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Australia the fed to cut interest rates by 25 basis points to a record low

by:Deyuan      2020-12-23
Australia the fed rate cut with a large resort, for event risk gathered this week & other Super week & throughout; Fired the gun. On Tuesday (

Beijing time. On August 2) 12:30, Australia the fed cut its cash rate target to 0. 25%, to 1. A record low of 5%.

Australia the fed said in a statement:

economic adjustment will be complicated by the Australian dollar exchange rate appreciation.

expected inflation to a period of time will remain at a fairly low level.

the CPI because of cut back to target the prospect of improvement.

job market indexes mixed.

low interest rates increase the real estate market risk is less likely.

the overall economic growth continues to moderate; The prospect of sustainable growth improve due to cut interest rates.

credit institutions lending a more cautious attitude on parts of the industry.

treasurer Morrison said today, cut does not mean the economy is in trouble.

the rate cut in line with expectations. Most analysts think before, in response to the rise in inflation is low and the Australian dollar exchange rate, Australia the fed will be necessary to expand the stimulus.

this is Australia the fed's second rate cut in three months. On May 3rd, in response to slowing inflation, Australia announced the fed cut interest rates by 25 basis points, broke the situation on hold for a year. The current Australian federal reserve chairman Glenn Stevens will step down in seven weeks.

in the past year, developed countries have economic improvement, while emerging markets face more difficulties. Continued downturn in China's commodity demand growth, is highly dependent on the commodity economy of Australia feel the real pain. Recent data show that the economy as a whole is still in the forward at a moderate pace.

at the same time, the fed's inflation concern in Australia is relatively low. According to official data released last week, core inflation in the second quarter to 1. 5%, well below the fed's 2% in Australia & ndash; — 3% target range. Fed officials worry that low inflation affects wages and merchants set prices and household spending.

bloomberg, according to the article consider that the labor cost growth is very weak, worldwide are under a very low cost pressure, Australian inflation is likely to last a long time. Australia the fed expects inflation as early as in the mid - 2018 - will return to the default target range.

in the context of domestic interest rates, once the cash interest rate below 1, so if you want to add more stimulus, Australia the fed might have to consider unconventional policies, such as QE.

after the fed cut interest rates in Australia, Australian three-year yields continued decline, is now down 6 basis points to 1. 394%. Aud/usd short term rapid falling about 50 points, minimum to 0. 7492. So far, aud/usd since January lows has rebounded almost 10%.
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