Stevens signals rate reduction
(22 April 2015 – Australia) Reserve Bank of Australia (RBA) governor Glenn Stevens has told a business lunch in New York that interest rates should be accommodative and the board was willing to lower the interest rate further.
He said the question of when to implement this needs to be on the table to help secure sustainable economic growth.
Housing prices, particularly in Sydney were part of the discussion although Stevens pointed out economically opinion should focus more on the disparate trends around the rest of the country.
The Federal budget was also under the microscope with Stevens saying Prime Minister tony Abbott and Treasurer Joe Hockey have his empathy on the current predicament.
"The Government has little choice but to accept the slower path of deficit reduction in the near term, I think," he observed.
"But, over the longer term, and I know they also agree with this, hard thinking still needs to occur about the persistent gap we are likely to see - under current policy - between the Government's permanent income via taxes and its permanent spending on the provision of goods and services.
"So the longer term fiscal task remains," Stevens said.
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