Don’t say I didn’t warn you. When the GDP figure came out two weeks ago I advised going long bullhawk rhetoric. Last week we were subjected to some extraordinary drivel at Business Spectator, where the bullhawks make their nest, and today another feathered bovine screetches completely free of this earth and into a fantasy world of unicorns, rainbows and other bullhawks. From Adam Carr:
We have the RBA’s minutes, but I’m literally not going to read them. The reality is the board have got things wrong and no, recent GDP and employment outcomes shouldn’t have been a surprise and they are certainly not puzzling as some have suggested.
The labour market and employment figures have been consistent for well over a year now as I have consistently highlighted. It is only delusion and sloppy analysis that lead to repeated claims of weakness. The RBA should not have cut rates, this is clear. They panicked and all they have managed to achieve in their panic is to undermine an already fragile confidence.
People can’t possibly believe things are really OK if monetary policy is continually eased in the face of very positive data. So, will they cut again? They shouldn’t, but they shouldn’t have cut previously and did. So I can’t say they won’t. As I have highlighted before, monetary policy is not being guided by economic data. Future decisions, as with past decisions, will depend on the news flow and the whisperings of the club.
