Mr Halmarick said the Reserve Bank of Australia (RBA) will likely push further into what he labels “conventional unconventional monetary policy space” at the Board meeting next Tuesday.
In a recent speech, the RBA Governor, Philip Lowe, made it clear that while the economic recovery was now underway, further monetary policy easing is coming.
“This easing is expected to involve a cut in the three key interest rates – the cash rate target, the 3 year bond yield target, and the Term Funding Facility target from 0.25 per cent to 0.1 per cent,” Stephen Halmarick said.
“Critically, this easing of monetary policy is expected to be implemented at the same time as the RBA looks set to revise upwards their economic forecasts given the run of better economic data.”
Mr Halmarick said monetary policy has a significant role to play in supporting the Australian economy by continuing to ensure very low borrowing costs, both for Commonwealth and State, are maintained for an extended period of time.