Wealthy retirees are evidently feeling empowered to demand that the economic interests of the rest of Australia be further put aside to serve them.
More interest rate cuts are coming. That’s virtually guaranteed after Thursday’s speech by Reserve Bank governor Philip Lowe, that has economists tipping the RBA will go two-for-two and cut rates again at its July meeting. In a speech on “The Labour Market and Spare Capacity”, Lowe told his audience that it would be:
… unrealistic to expect that lowering interest rates by one quarter of a percentage point will materially shift the path we look to be on. The most recent data — including the GDP and labour market data — do not suggest we are making any inroads into the economy’s spare capacity. Given this, the possibility of lower interest rates remains on the table. It is not unrealistic to expect a further reduction in the cash rate as the board seeks to wind back spare capacity in the economy and deliver inflation outcomes in line with the medium-term target.