Reserve Bank of Australia Extends QE Program Amid Recovery
The Reserve Bank of Australia has extended its government bond-buying program as a means of supporting the country’s economy as it continues to emerge from recession, while also keeping pressure on the Australian dollar. RBA Governor, Philip Lowe, has stated that the country’s economic recovery has been stronger than expected, but the economy is expected to operate with significant spare capacity for a prolonged period. The central bank has also stated that it will require significant gains in employment and a return to a tight labor market before interest rates are increased, which is not expected until 2024 at the earliest.
What’s in focus for Aug. 24 – 28 on Politics, Economy, Covid and the FED
This week, the highest impact economic events will be the Republican National Conference starting on Monday, the August IFO survey for Germany on Tuesday, and the Federal Reserve Chair Jay Powell speaking at the Jackson Hole Symposium on Thursday. Powell’s speech, which will reveal the findings of the Fed’s long-running review on monetary policy, is expected to be the marquee event of the week. Powell is expected to guide inflation expectations higher while keeping nominal yields anchored, but traders will be keen to see how close they are to moving to a more defined forward guidance, and specifically the appetite to move sooner to average inflation targeting.