How Bank of America's Nick Stenner predicted last week's RBA shocker
The ex-RBA economist was a lonely voice in the market tipping rates to stay on hold last week. He explains the thinking behind the call.
Almost no economists anticipated the Reserve Bank's shock decision to keep rates on hold in July at 3.85%. One of the few exceptions to this was Bank of America head of Australia and New Zealand economics Nick Stenner.
Stenner, who worked at the RBA for about 12 years until 2024, held firm on his contrarian view despite high-profile bank economists shifting their positions and the markets overwhelmingly pricing in a 25 basis point cut.
He admitted it was “definitely” hard to stick to his guns as the tide turned.
“We had a look at the market surprises going back 20 years or so and how often the RBA would actually go against what the market was suggesting … a market surprise [of this nature] is really rare historically,” Stenner told Capital Brief.
