First they are "candy-arsed", now Australia's central bank is "wimpish". Koukie's war on the RBA to convince them to cut by 50 in May continues today (of course, lower interest rates would be an electoral tonic for Koukie's beloved but ailing Labor Party). This is the third time in the last week he has forecast a 50 basis point cut in May, although, ironically, he wavered slightly on Twitter following the unemployment data (something he today criticises others for doing):
The RBA seems to have been wimpish in holding off rate cuts so far in 2012...The bottom line is that the RBA has oodles of scope to be cutting interest rates and only in recent times has the Bank realised this. It knows it has to catch up – it knows banking funding cost pressures mean they will have to cut official rates harder to achieve the same impact on mortgage interest rates by way of example. It also knows that overall activity is still on the soft side. So get set for a 50 basis point cut in official interest rates in May. Such a move is essential if the RBA is to catch up to where rates should be – that is, with mortgage rates at 7.0% or a little less.
Needless to say, the housing industry, manufacturers, and the Labor Party would be jumping for joy should the RBA take Koukie's advice...
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