Credit growth posted a predictably dismal result of +3.2 per cent over the year to May 2020.
Personal, business, and housing credit growth all remained either muted or anaemic.
But it was interesting to note broad money growth ripping to +9.3 per cent in May.
The Reserve Bank is adamant that the official cash rate target will not be moved from 0.25 per cent until it's clear that progress is being made towards full employment, which realistically looks to be years away.
But there has been a significant increase in RBA assets, up from $116 billion in February to $281 billion by the beginning of this month.
The RBA has purchased $50 billion of government bonds to date.
In yesterday's policy statement the RBA said it hadn't purchased government bonds for some time, but was prepared to scale up purchases again if required.
In the US the Federal Reserve has been regularly criticised for pumping up stock market prices far above their fundamental valuations by ballooning its balance sheet out to US$7 trillion.
Given the parlous state of the Australian economy - and that inflation has already been below target in Australia for half a decade - the RBA buying bonds directly from Treasury to fund the deficit might be one possible pathway to navigating the September fiscal cliff.
You can read more about the July Monetary Policy Statement with James Foster here.
You can read more about the July Monetary Policy Statement with James Foster here.
