RBA Sticks With Cautious Taper Plan as Delta Sweeps Economy
Comment of the Day

September 07 2021

Commentary by Eoin Treacy

RBA Sticks With Cautious Taper Plan as Delta Sweeps Economy

This article from Bloomberg may be of interest to subscribers. Here is a section:

Lowe’s decision to proceed with the taper, while extending its duration, showed his desire to maximize flexibility to respond to the economic fallout from delta, which is proving far more difficult to contain than expected.

The RBA’s gentle shift from ultra-accommodative settings also fits in with more nuanced recent signaling from global policy makers. The Bank of Canada has taken the lead on tapering, the European Central Bank may follow this week and the Federal Reserve is likely to do so later this year, but all are highlighting the gradual and flexible nature of their moves.

Eoin Treacy's view

The RBA has little choice but to tread softly with its tapering program because so many uncertainties are still present. Central banks are going to be led by the data. That’s particularly true as the various mutated forms of the virus present challenges for reopening.

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