Nomura Says Risks Indicate Lower RBA Cash Rate

The transcript discusses the Reserve Bank of Australia's (RBA) policy expectations, highlighting a potential cut in the cash rate by the end of 2017. It outlines the challenges faced by the RBA, such as high household debt and low wages, which complicate policy adjustments. The RBA is seen as reluctant to cut rates, but economic underperformance and slowing house prices may pressure them to consider further stimulus.

What was the initial expectation for a cash rate cut by the RBA by the end of 2017?

• 20%

• 40%

• 10%

• 30%

What are some of the challenges faced by the RBA in deciding on monetary policy?

• High employment rates

• High household debt and low wages

• Rising government spending

• Increasing exports

What measures might the RBA consider to address financial stability concerns?

• Increasing interest rates

• Implementing stricter macroprudential measures

• Reducing government spending

• Encouraging more foreign investment

What signs indicate that the RBA might consider a cash rate cut?

• Rapid economic growth

• Stable house prices

• Tentative signs of easing in house prices

• High inflation rates

What might increase the pressure on the RBA to consider further stimulus?

• Improving economic performance

• Continued economic underperformance and low inflation

• Rising house prices

• Decreasing household debt