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RBA Policy debate hinges around risks of ultra low rates
The employment report for September printed a modest fall in the unemployment rate from 5.26% to 5.20%. Further, the underemployment rate fell from 8.53% to 8.35%. That will be sufficient to avert another rate cut from the RBA in November. Westpac has consistently argued that a cut in November was unlikely and the Employment Report strengthened our case. The October RBA meeting minutes made an important point that had not been part of earlier commentaries: “Members also discussed the possibility that policy stimulus might be less effective than past experience suggests. They recognised that some transmission ... (full story)