It has been another big week in economics and for markets, and our guest this week on Devils and Details is Shane Oliver, chief economist at AMP Capital.
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The day after the RBA cut rates the Australian dollar actually ended up higher against the US dollar thanks to some big moves in global currency markets. BI’s global markets correspondent David Scutt explains how this happened and we look at where the Aussie dollar and interest rates might go to from here.
And we also take a bit of a dive into the vexed question of funding costs for the major Australian banks, which have been under fire this week from politicians for not passing on the full 25 basis points of the RBA cut. Soon after we recorded, Malcolm Turnbull announced the banks would be called to appear before a parliamentary committee to explain their rates decisions.
And finally we look at the five big questions that former PIMCO boss Bill Gross has set out as the big issues facing the global economy.
- “When does our credit-based financial system sputter/break down?”
- “Can capitalism function efficiently at the zero bound?”
- “Can $180 billion of monthly quantitative easing by the ECB, BOJ, and the BOE keep on going? How might it end?”
- “When will investors know if current global monetary policies will succeed?”
- “What should an investor do?
There aren’t any easy answers here, but we have a go anyway. Enjoy!