What would you change if you were the RBA Governor? Steen Jakobsen, Chief Economist and CIO of Saxo Bank, says for the most part he agrees with the views of the RBA. However, he says the Australian economy is going to need further stimulus and that the agenda for macro prudential reforms will need to be moved forward. Jakobsen says that interest rates could be at 1.5% – 1.75% in Australia and that measures will need to be taken to stop this adding further fuel to the housing market investment. Having just landed in Sydney Jakobsen said advertisements from the Banks for low interest rate loans were the hall marks he had observed prior to property market crashes in Europe. Driving around Sydney I saw advertisements for 0% interest for 1 year and 0% interest for two years…Everything I have seen this morning indicates to me that we are in front of a huge correction.
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