Standard Chartered with a forecast for a rate cut from the Reserve Bank of Australia in July, November, and December 2019.
Stan Chart citing:
- unemployment rate to spike in Q3-2019, necessitating RBA rate cuts
- RBA now lowering its expectation on the non-accelerating inflation rate of unemployment (NAIRU) to 4.5% from 5% earlier, we believe the required policy action on a rising unemployment rate will be larger
- hurdle to cut rates below 1% is still quite high
- RBA will likely require the unemployment rate to rise close to 5.5% before it cuts rates below 1%
- We expect this to happen in Q3, as job losses in construction accelerate
Wow. Big call. The RBA have been telling us of late to watch developments in the labour market. Stan Chart doing so and basing their projections on what they expect for unemployment..
