RBA: Semi-annual testimony was a staid affair – TDS

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According to analysts at TD Securities, the RBA’s semi-annual testimony on monetary policy was a staid affair.

Key Quotes

“After reading the opening statement, three hours of questions kept returning to a few main themes: (1) why is consumption the main downside risk (RBA: not house prices, but weaker incomes, behind softer consumption); (2) why did the bank discuss QE (RBA: from a risk management perspective if there is a crisis it is in the toolbox, but right now “extremely” unlikely to need it); (3) impact of China coal import ban (RBA: not necessarily political and not expected to derail the economy). As expected no need to discuss the exchange rate, except the Governor was surprised it fell so much on the China coal import ban headlines. RBA confirmed that wages/income growth is needed for a rate hike, but a long way from taking that decision (RBA: no hike this year).”

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