Tuesday, 5 May 2015

A prudent Reserve Bank would wait

The monthly official interest game is upon us. And those bank economists who make a living selling their snake-oil opinions think the Reserve Bank board will cut the official rate by 0.25 percentage points to 2%.
Well the market, one those bank economists tend to make, tends to agree with them. Here's The Owl's interest rate indicator:

Some how it does not seem right to me. Perhaps an interest rate cut will be necessary but if I was a Reserve Bank board member I would wait see what the government did in its budget before moving.
I'll be having a small wager on there being no change tomorrow. See The Political speculator's diary.
Post a Comment