Economics
RBA’s Yield-Curve Control in Cruise Control as Markets Take Hint
- Healthy bond markets happy to absorb record stimulus borrowing
- Bill Evans sees RBA raising 3-year target to 0.4% by mid-2022
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The Reserve Bank of Australia has shifted its yield curve control into cruise control having abstained from buying securities for 47 days now, the same length of time as its initial streak of purchases.
That’s because the government bond market is functioning much better than in March when QE began, leaving the three-year yield anchored around the 0.25% target. The dislocated state of the market was a key factor in the RBA scooping up more than A$50 billion ($34.3 billion) of securities of various maturities in just under seven weeks.