So my old mate, News Ltd's Terry McCrann, tried to convince us all yesterday that the RBA's Board was "unified" around its dovish stance (ie, sufficiently dovish to ignore a very high core inflation print in Q1 and the fact that even year-on-year headline inflation is currently way above target). Unfortunately for Tezza, nobody really believes this RBA spin, which he and we well know it is. The AFR today reports Deustche's views (it was, in fact, Scott Haslem, the Chief Economist at UBS, who first pushed the idea that there might be a disconnect between the RBA's staff and its conflicted Board members):
"Deutsche Bank chief economist Adam Boyton said the RBA board, with representatives from industry, might be more worried about the strength of the economy than economists working at the central bank. The strong tone and inflation-fighting focus of the May Statement of Monetary Policy contrasts with what the (external) RBA board members seem to be discussing at their monthly interest rate meetings. On Tuesday, RBA board member and chairman of BlueScope Steel, Graham Kraehe, wrote in The Australian Financial Review that the steel industry was “managing a number of challenging macroeconomic factors, including the high dollar and raw material costs”. He criticised the Ross Garnaut’s Climate Change Review, which supports a carbon tax. Mr Corbett, a prominent retailer and Fairfax Media chairman, said the economy was remarkably weak outside the mining sector. Other members of the RBA board include resource industry representatives, BG Australia chief executive and recent appointee Catherine Tanna and Origin Energy director John Akehurst. Former banker Jillian Broadbent, together with Treasury Secretary Martin Parkinson, and RBA governor Glenn Stevens and his deputy Ric Battellino round out the board."
