RBA QE to involve volume rather than yield target

The minutes of the latest meeting all but confirmed that the Reserve Bank of Australia will launch quantitative easing at its upcoming meeting in November. While we previously argued that the RBA would opt for a target for bond yields, its focus on the size of its assets suggests it’s more likely to implement a target for the volume of bond purchases. Meanwhile, the resounding victory of Jacinda Ardern’s Labour Party in New Zealand’s parliamentary election should ensure that fiscal policy remains among the most expansionary in the world.