My comrade Terry McCrann--we are kindred spirits on some things--calls it right on the RBA, which will be no surprise to regular readers here:
THE good inflation numbers will not, and never were going to, prompt the Reserve Bank to cut its official interest rate at its next meeting in two weeks. The only thing that could -- indeed, it probably would -- trigger a rate cut then, is a European financial meltdown. Even a continuation of the turmoil in equity and bond markets that we've seen in recent weeks, would not be enough. Equally, if we'd -- most improbably -- got bad inflation numbers, they would not have caused the RBA to contemplate a rate increase. In short, both hikes and cuts were off the agenda, absent a European meltdown. Most unusually, the 'all-important' CPI numbers this time were always going to be essentially irrelevant to the immediately subsequent RBA rate decision.
