OMG RBA
The Reserve Bank’s shock decision to hold rates at 3.85% has stunned markets and economists, reigniting debate over its communication approach.
We were all set to lead this newsletter today with Michael Pelly’s must-read interview with the country’s most senior legal official, Chief Justice Stephen Gageler, which touched on everything from the "existential" challenge of AI for the legal profession to the changing face of the High Court.
But then the nation’s most senior economic official, Reserve Bank governor Michele Bullock, shocked economists, financial markets, the media and the country with her most surprising decision in the role so far.
That tells you just how locked in everyone believed a 25 basis point cut was. Instead, the RBA kept the cash rate on hold at 3.85%.
Even Treasurer Jim Chalmers sounded surprised, saying he wouldn’t “second guess” the RBA’s decision but noting it was a surprise to markets and would disappoint “millions of Australians around the country” who are “desperately” hoping for rate relief.
