Asset Allocation Strategy
The RBA’s Last Cut as it Moves into New (QE) Territory
Mon 2nd November, 2020

The RBA has stepped up its dovish rhetoric over the past few weeks in a series of speeches from key personnel including Governor Philip Lowe.

The RBA is now widely expected to cut interest rates by 15bps this Tuesday 3 November to take the official cash rate to 10bp. The market’s pricing for a cash rate cut this week is now at around 85%.

Expected to be the RBA’s final conventional interest rate cut, we turn our attention to the specifics of its flagged quantitative easing (QE) bond purchasing program. In this week’s macroeconomic view we address:

  • The debate around the potential broadening of the RBA’s bond purchase program (quantitative easing - QE)
  • What the RBA is trying to achieve with an expanded QE program
  • The bigger picture and the RBA’s backward-looking inflation target in line with the US Fed
  • The policy shift’s incremental impact on the economy

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Written by

David Cassidy , Head of Investment Strategy

David is one of Australia’s leading investment strategists.

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