28 Aug Negative rates, QE & other measures the RBA may deploy
Key Points:
- The RBA is likely to first exhaust conventional easing by cutting the cash rate to 0.5% by year end before deploying unconventional measures beyond forward guidance which is already being used.
- Unconventional monetary policy measures could help the economy, but negative interest rates are unlikely and quantitative easing would be most effective and fairest if combined with fiscal stimulus.
- For investors it means low interest rates for even longer.
