The decision at the RBA Board meeting to cut the cash rate by 25bpts to a new record low of 2½% was accompanied by a rare uniformity of views. Financial markets had a cut fully priced and 26 out of 27 forecasting houses were expecting a move. The consensus clincher was a speech last week by RBA Governor Stevens that was not of his usual “glass half full” variety.
The Statements that followed the last rate cut in May and no change decisions in June and July were largely of the carbon paper variety. Those Statements conveyed an impression that the Bank was generally happy with the economic outlook. They saw reasonable prospects of a pick-up in global growth next year. And they judged that policy settings would contribute to a strengthening in domestic activity as well. Today’s post meeting Statement has not shifted these growth sentiments.
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