Australia’s Low Interest Rates Could Be Harmful
Publish Date : 2019/11/04 - 06:09

Australia’s monetary policy easing has driven interest rates down to levels where they could be doing more harm than good for the economy.

The central bank could be bumping up against the “reversal interest rate,” a level at which accommodative policy begins to produce unintended consequences. The clearest sign of that is the slide in consumer sentiment since the Reserve Bank began lowering rates in June.

In October, prices in Melbourne surged 2.3%, the biggest monthly gain in almost 10 years; indeed, since bottoming in May, they have climbed 6%. Sydney isn’t far behind, jumping 1.7% last month and rebounding 5.3% since May.

Source: Investing

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