This comment was made this week at http://www.macrobusiness.com.au (link may be locked)
More to the economy than houses?
Even the Governor is clear that the cost of money is not constraining business investment and hiring decisions.
The RBA are targeting house prices as that is the only real transmission mechanism for lower interest rates to ‘support demand’. Lower rates haven’t affected personal credit. Pumping house hold debt is the ONLY show in town until the LNP get the boot and that only works if prices are rising solidly.
There will be no effective MP because it weakens the RBA strategy and the only market that would get it would be Sydney anyway.
If the RBA are really targeting the exchange rate with the cuts and not household debt they would say so.
Along with http://www.macrobusiness.com.au/2015/02/bloxo-addresses-rba-wedgie/#comment-1056849
The RBA did not shed a tear as the export sector and import competing sectors were roasted as the $AUS rose.
In fact they went to great and repeated pains to explain it was nature at work.
They have made no comments that they believe it is their job to control exchange rates with interest rates.
What reason is there for the RBA not making it clear that they have changed philosophy so fundamentally.
Especially when many would probably applaud such a change.