Will Australia implement quantitative easing?

With the cash rate already at just 1.5%, the Reserve Bank has limited ammunition left to deal with a falling housing market and a slowing Australian economy. Even if the RBA does cut, the effects are likely to be limited at such a low level, explains Charlie Jamieson, Chief Investment Officer at Jamieson Coote Bonds.

“How effective will that be? Not hugely in our opinion. It will be very good for confidence, it’ll lower the Australian dollar, we’d expect. Both of those are net benefits. But the problem with the property market is availability of credit, rather than the price of money.”

With the limited effects expected from rate cuts, where can the RBA go from here? In this video, Charlie explains why QE could be on the cards in Australia, and what it might look like. 

Avoid getting caught in the trap

As we continue to face volatile market periods, bonds will offer the stability of principal and income, as investors seek the highest quality investments. Click contact below to find out more or visit Jamieson Coote Bonds website for further information.