Westpac\u2019s chief economist Bill Evans has made the counter-consensus call that the Reserve Bank of Australia will keep interest rates on hold until 2021, casting doubt over its forecasts, and acknowledging that financial conditions are tightening in the absence of rate hikes.<\/p>\n\n\n\n
\u201cSome may argue that we are unrealistically forecasting that Australia will completely miss the global rate hike cycle if rates remain on hold for such an extended period,\u201d the economist wrote. \u201cWe differ from that view arguing that financial conditions are affected by more forces than just the RBA cash rate.\u201d<\/p>\n\n\n\n
\u201cThe key dynamic here is an expectation that the household can continue growing its consumption spending at around a 3 per cent pace,\u201d which would require solid wages growth and any wealth-effect spillover from house prices to be neutralised. That seems unlikely, Mr Evans suggests.<\/p>\n\n\n\n
Aside from ongoing macro-prudential supervision and regulation, \u201cno further conventional tightening of policy through a rate hike from the Reserve Bank seems likely \u2013 even as far out as 2020.\u201d<\/p>","protected":false},"excerpt":{"rendered":"
Westpac\u2019s chief economist Bill Evans has made the counter-consensus call that the Reserve Bank of Australia will keep interest rates on hold until 2021, casting doubt over its forecasts, and acknowledging that financial conditions are tightening in the absence of rate hikes. \u201cSome may argue that we are unrealistically forecasting that Australia will completely miss…<\/p>","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-945","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\n