Westpac's Bill Evans: 0.25% RBA cash rate by June 2020; QE to follow

Westpac now expects two rate cuts next year from the RBA with the cash rate cut to 0.25% in June 2020. Quantitative Easing is also expected to begin in the second half of 2020.

..."while detecting a reluctance to adopt Quantitative Easing we expect that economic conditions in the second half of 2020, coupled with the need to maintain a credible easing policy, will see the RBA adopt QE in the second half of 2020"

Read More: https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/November/er20191127BullRBACutCashRate.pdf

The AUD market thinks this is a credible proposition:

 

In other words the economy is going to **** itself , and all the interest rate cuts are going to fail to Kickstart the economy, for the same reason all the others failed.
Way to much household debt and no wage growth in the foreseeable future.
In other news the government has told the health insurance companies that a 3.7% rise is to much for its members.
Lets not hope they dont put measures in place to control rents for property investors.

 

I wouldn't take too much notice of Westpac this week.

 

I bought some Westpac shares today. Assuming QE happens here, then it will devalue the AUD, so probably best not to hold cash. The QE in the US inflated equities, so I would think ASX blue chips will do great if the RBA hits the print button.

 

The AUD market thinks this is a credible proposition:
i could post a chart for the week month prior till the last few days on this company and anything that goes to print in future forecasts because the ripples are starting to spread and the still growing legal mountain of debt..

 

I dont. But I take notice of Bill Evans whenever he talks. He is rarely wrong.

 

What's the pathway back from this look like? How do we return to conventional monetary policy/non 0 interest rates after this can is opened?

All this is doing is giving more time for the smart money to sell their debt to greater fools.

 

The U.S fed tried and all it got was a few black eyes as Trump got really ****** off.
Politicians hate it when interest rates go up, even when they are at the lowest point .
The RBA keeps on lowering interest rates to get unemployment down and stimulate wage growth at the same time the government is letting in a record amount of skilled temporary migrants.
Makes you think that the government has an hidden agenda about really kick starting wage growth.
In yesterdays Australian.
NoCookies | The Australian

 

Maybe just look at the high end companies ..I don't see any on the radar that are about to be de-listed and privatised to reduce their reporting requirements and share holders short term demands..

Depends on what you read but most people that invest and i talk to try to dismiss all the claims from conspiracy theorists who suggest that this part of the cycle is any more serious then when Quintrex went bust --One Tel --
GFC the list is endless and all it takes is discipline if things go wrong..

 

Unless another miracle Mining-Boom-type events happen in Australia, this country is facing Secular Stagnation for years and decades to come.

We'll probably see ultra-low interest rates for the next 3 decades or more.

 

At least the US unemployment rate went down to long-time low (3.5%) vs OZ (5.3%), without stoking inflation.

 

We should be able to get unemployment down to almost zero and still have no inflation/wage growth with casualisation of the workforce.

For example, lets say 10 years ago I employed 3 full time (40 hours a week) people - 120 hours a week in total.

Today, I employ 6 casuals 0.4 FTEs. I now have employed twice as many people, but the aggregate hours worked is 96 hours a week in total. (Times are tough and I'm cut back in these difficult times)

The ABS brought in aggregate hours worked a couple of years ago, because unemployment is really a meaningless figure (unless you are in politics and use it to demonstrate your strong economy)

Also have a look at our underemployment rate. Now it's clear why there is not wage growth in Australia.

 

Doesn't really address my comment though. Not saying that the financial system won't survive and strong companies won't recover.

But they don't call it unconventional monetary policy because it is tried and tested.

 

Not to mention 1hr a week work is classified as employed. These statistics really do become meaningless in that case.

 

There is a good book Tim89.
By--William Manchester--The Last Loin...
Have a read about a Man who saw the fiture long before anyone..

BTW, no one will ever address your comments as i'm not sure there is a ignore tab within this site..

 

Hey willair there is - see my post to other trolls. Don’t feed the trolls oxygen.
To do this - Select the user name - then ignore.
Good luck!

 

Thanks for reminding the world that grown adults ignore people that disagree with them on economic policy on a forum discussing economics.

 

Nice abuse & troll try - I wasn’t disagreeing with you, but pointing out how to a user how to ignore people.

Learning from those with a different opinion can help you improve but there is a difference between valuable learning and time-wasters who continually change positions, circular arguments, etc.
From this response and others in another thread it seems clear which camp you are in.

Good luck with your investments.

 

USA:
Unemployment Rate = 3.5%
Hours worked per employed worker = 1786 pa

AUS:
Unemployment Rate = 5.3%
Hours worked per employed worker = 1665 pa

Not only does the USA have lower jobless rate, they also work more hours per person with a job.




OECD (2019), Hours worked (indicator). doi: 10.1787/47be1c78-en (Accessed on 07 December 2019)
Average annual hours worked is defined as the total number of hours actually worked per year divided by the average number of people in employment per year. Actual hours worked include regular work hours of full-time, part-time and part-year workers, paid and unpaid overtime, hours worked in additional jobs, and exclude time not worked because of public holidays, annual paid leave, own illness, injury and temporary disability, maternity leave, parental leave, schooling or training, slack work for technical or economic reasons, strike or labour dispute, bad weather, compensation leave and other reasons. The data cover employees and self-employed workers. This indicator is measured in terms of hours per worker per year. The data are published with the following health warning: The data are intended for comparisons of trends over time; they are unsuitable for comparisons of the level of average annual hours of work for a given year, because of differences in their sources and method of calculation.

 

Generally employees in the US have less public holiday and annual leave than AU employees as well as benefit such as minimum wage, overtime loading, pension, etc. Hence it is not suprising to see the hours worked per employed person in the US is higher than AU. It is actually quite suprising that the gap is not as big as expected.