Westpac's very experienced Chief Economist, Bill Evans, who is forecasting four rate cuts starting in December (not quite as brave as Goldman Sachs's Tim Toohey predicting rate cuts in October and November!), explained that he was 'disappointed' with the RBA's hawkish and growth-insensitive tone in the Statement following the Board meeting today. I can understand this from Bill's perspective (although I agree with the RBA). Bill comments:
"Given our forecast that we expect the RBA to be easing rates in three months' time, this is a disappointing statement. From our perspective there has been a clear ongoing deterioration in domestic economic conditions over the last month but none of this has been recognised in the statement.Instead the unavoidable reference to global financial conditions has been made but no position has been taken, merely "outlook for the global economy is less clear". We would have though[t] that the message from the global economy is a bit more unequivocal than that."
