I posted on this earlier:
Lowe met with the firm on Thursday last week. From the Australian Financial Review article (gated):
- “As three-year bond futures sold off on Thursday afternoon, the market was abuzz with talk that Lowe had considered aloud at Barrenjoey the possibility that Australia’s cash rate could go as far in this rising cycle as the US Federal Reserve’s (now at 4.5-4.75 per cent).
- Such an outcome would be way outside consensus market thinking. Even after the hawkish RBA statement accompanying Tuesday’s decision, nobody has really contemplated the spectre of an RBA cash rate with a 5-handle.”
While the RBA governor dining with market participants is not unusual, two points have been made on this event. Lowe's comments are not ones he has made publicly. And Lowe has not spoken in public since November 2022, over two months. Lowe was expected to speak on his economic outlook and policy for the year at the National Press Club but instead chose a written statement.
Lowe's fumble comes at a time when a formal enquiry is being conducted into the RBA. The RBA may find itself holding regular press conferences to explain interest rate decisions to the public after meetings. Its pretty much the only DM central bank that does not.
Lowe's term as Governor expires on September 17 this year. His two predecessors each had their term extended. It's a very good bet that Lowe will not.
