Weeoo, weeoo, weeoo. The Pascometer siren is screaming:
When is a flat outlook an easing bias?
When there’s a cheer squad wanting the Reserve Bank to do something, almost anything, and especially when within that cheer squad there’s a group wanting an interest rate cut.
Also read: RBA confidence about economy grows
The governor’s brief statement from the final RBA board meeting of the year is a little different in some aspects but the core of it boils down to be much the same as the last six:
- The signals about the economic outlook are mixed;
- Growth is moderate, a bit below what it could and should be;
- There are some positive signs that maybe local non-mining business investment just might be about to turn the corner;
- Inflation isn’t a worry;
- Rates are already very low and providing the stimulus that low rates can provide;
- If necessary, the RBA is ready to do whatever it can to assist growth if the economy weakens further;
- There’s certainly no rate rise on the horizon
So, it’s the same old same old – but that’s translated by most commentary into the RBA having “an easing bias”.
I take that phrase as meaning the RBA is leaning towards cutting rates again. I think that’s wrong – the RBA is leaning towards keeping rates steady.
And it will be forced to back flip before terribly long.
Weeoo, weeoo, weeoo.
