Thursday, September 4, 2014

RBA will not lower interest rates to avoid stoking housing bubble

Australia RBA wary of stoking house prices with lower rates
"It is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that," Stevens told an economics event in Adelaide.

The RBA this week held interest rates at a record low of 2.5 percent, marking 12 straight policy meetings since it last cut.
Stevens said a recent rise in unemployment to a 12-year high of 6.4 percent was "concerning", though he cautioned that it was hazardous to read too much into one month's data.
The cycle is running out of steam if you are stimulating but the returns on stimulating are declining.

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