Terry McCrann is worth a read today:
BOTH the Reserve Bank and Treasury delivered exactly the same message yesterday about two very different things.
Treasury head Martin Parkinson 'said' he didn't have the faintest idea whether the Budget would be in surplus in the 2012-13 year.
And RBA Governor Glenn Stevens 'said' he didn't have the faintest idea whether or not he would cut interest rates again, and if so, when.
Now I have - partially - verballed both of them.
Verballed them, as they didn't literally say those two things. Parkinson most certainly would not have been 'on message' if he had.
But it's only a partial verballing, as in each case it was not simply a reasonable extrapolation on what they actually said. But arguably, the most clear-cut and most relevant extrapolation
And especially in relation to the RBA and rates, understanding this is critical to getting an appreciation of what might happen with rates, along with both the causes and consequences...
Now it's rare for the RBA to have only one rate cut at a time. In real terms, that's all it has had so far this year.
This does not mean the RBA will cut again in June. But more broadly, that Stevens & Co have another cut 'up their sleeves.'
