On Tuesday night, in a speech to the Australian Business Economists, Dr Lowe delivered to the market advice which outlined how an Australian form of QE might take shape. Lowe was quick to offer a raft of predictable caveats, assuring the markets that policy of this sort would only take action at an interest rate of 0.25%, and is subject to further decision making.

Government bonds were labelled as the vehicle of choice for the RBA to target in a QE program, with Lowe stating that there was “no appetite to undertake outright purchases of private sector assets as part of a QE program”. The assertion from Lowe is a distinction without a difference, with the additional liquidity (at least in part) bolstering demand for private sector assets.

It’s yet another bearish sign for the economy both domestically and internationally. The head of the Reserve Bank is compelled to deliver a speech providing guidance on the use of unconventional monetary policy in Australia, and the markets are listening intently. Reassurance that the economy is not suffering from the specific economic concerns of Europe or Japan is a misdirection from our myriad domestic issues such as sluggish wage growth, abysmal economic complexity, sky high private debt and rising unemployment.

The speech serves as forward guidance, and in our view, a strong indicator that the RBA is planning for QE under conditions which are almost certain to mature.

What this Blog is about and why i’m writing it

In man’s struggle against the world, bet on the world.

— Franz Kafka

Greetings from Stewart’s Market Observer, authored by me, Mitchell Stewart. This blog will cover finance, economics and policy, focusing mainly on the Australian market (though not exclusively).

I created this blog as a means to both communicate and compile my thoughts and strategies relating to the current and future state of the Australian and international markets, noting over the past few years a number of troubling indicators of turmoil ahead.

Here, I will discuss in depth these indicators and hopefully arrive at some competitive plans to effectively position personal wealth profiles to benefit from market developments.

Everything you read here is my personal opinion on markets, personal finance, economic policy and investment strategy and does not form professional or individual advice.

I hope that you enjoy my content, please feel free to get in contact with any feedbank you might have.

Mitchell Stewart