Shadow RBA finally catches down to the doves macrobusiness.com.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from macrobusiness.com.au Daily Mail and Mail on Sunday newspapers.
Date Time
Cash rate should stay on hold for next year
The official cash rate should remain at a historic low of 0.1 per cent for at least one year, according to The Australian National University’s RBA Shadow Board.
In its latest vote, the Shadow Board attaches a 95 per cent probability that an overnight cash rate of 0.1 per cent is the right setting, and only a five per cent probability that interest rates should rise.
This is down slightly from the Board’s May vote, which attributed a 98 per cent probability that 0.1 per cent was the correct setting.
The Board has a 62 per cent conviction that 0.1 per cent rates are the right setting in 12 months’ time.
The official cash rate should remain at a historic low of 0.1 per cent for at least one year, according to The Australian National University’s RBA Shadow Board. In its latest vote, the Shadow Board attaches a 95 per cent probability that an overnight cash rate of 0.1 per cent is the right setting, and only a five per cent probability that interest rates should rise. This is
The Budget And The Stock Market
May 13 2021
The FY22 Budget continues the transition from crisis support to growth recovery and imbeds active policy support into key areas like aged care, and child care, plus a timely extension for tax incentives that allow current activity momentum to be sustained.
-Far more than expected additional fiscal stimulus of $96bn over 5 years
-Brokers believe conservative assumptions leave door open for further upgrades at mid-year
-Budget 2021 assumes a further delay to re-opening of the international border until mid-22
-Some policy initiatives – that add to the demand for housing – deemed inappropriate for the economic cycle
(Image: Private Media)
The Morrison government has committed Australia to an era of big government stretching into the 2030s, with a long-term rise in spending in key areas and a significantly slower reduction in the budget deficit than previously planned.
The government will bank savings from a significantly faster economic recovery this financial year, pulling the deficit down from nearly $200 billion in December’s Mid-Year Economic and Fiscal Outlook (MYEFO) to $161 billion. But the increase in government spending will begin next year: the forecast deficit for 2021-22 is barely changed at $106.6 billion, compared to $108.5 billion in MYEFO, while the deficits for 2022-23 and 2023-24 will actually increase above even the levels forecast in last year’s budget.