Bets Are Off for Future RBA Rate Cuts, But Keep One Eye on China
- Lowe signals tolerance for weak inflation in Tuesday decision
- Traders pare bets for 2017 rate cut to maximum one-in-three
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Australian central bank Governor Philip Lowe gave his clearest sign yet he’s not hankering to cut the nation’s record-low cash rate.
Lowe’s upbeat economic growth outlook Tuesday combined with a concession that house prices in some markets had been “rising briskly” signals he’ll be unwilling to cut again and risk stoking property values further. That spurred money markets to pare bets for easing through the end of 2017 to a one-in-three chance. The upshot: it will take more than just low inflation to draw another policy response.