Reserve Bank boss Glenn Stevens is to face his twice-yearly grilling from a parliamentary committee. Source: AAP
RESERVE Bank boss Glenn Stevens will have some tough questions to answer when undergoes his regular twice-yearly grilling from MPs.
THE central bank governor will be in Hurstville, in Sydney's south, for Friday's appearance before the House of Representatives Standing Committee on Economics.
The big question will be why, after spending all of 2014 repeatedly signalling "a period of stability in interest rates", the RBA turned on a dime and cut the cash rate less than a fortnight ago.Being a political forum, the hearing will also no doubt examine the effect of political instability on consumer and business confidence, key ingredients in the outlook for consumer spending and business investment.Earlier this week the ANZ-Roy Morgan weekly survey of consumer confidence recorded a small fall despite the rate cut."The modest change likely reflects the positive impact from interest rate cuts, somewhat offset by concerns about the economy and government leadership speculation," ANZ's economists said.And the committee will want more detail on the RBA's view that the unemployment rate is now expected to rise further and peak later than it previously had expected.The RBA has not yet put a number on the peak jobless rate, but it has recently issued a chart showing the jobless rate topping out just below 6.5 per cent in early 2016.Since then, new data has shown a jobless rate of 6.4 per cent in January, before the RBA released its forecasts.With the hearing in Sydney, a city boasting the fastest rate of house price growth in the past year, the committee may also focus on the potential fallout in real estate markets due to the new record low cash rate.Although Mr Stevens is practised at deflecting such questions, the committee will also try to eke out some clues to the likely path of interest rates.At present, the futures market gives a further cut to two per cent in March a seven in 10 chance.Anda sedang membaca artikel tentang
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