While interest rate cutting cycles are usually long-drawn out processes, if the market forecasts are correct, this would be the shortest and sharpest ever.
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00:00The RBA cash rate had been at 4.35% for 468 days.
00:07The average time at peak is 130 days.
00:09So this one's been long, but not the longest.
00:12That was 595 days at 7.5%, between December 94 and July 96.
00:18And here's the display of all the rate cut cycles since then.
00:22The one during the GFC in 2008 was an aberration, it was short and sharp.
00:26These were mostly, though, long-drawn-out affairs,
00:29especially in recent times, 2019, 15 and 11.
00:33If the market forecasts are right,
00:35this will be the shortest and shallowest of them all.
00:38Here are the Reserve Bank's new economic forecasts
00:40for the year to next June.
00:42Now, the reason for the cut today can be found in the first three lines.
00:46Inflation, incomes, economic growth, all down,
00:50with inflation now expected to be within the 2% to 3% target by June,
00:54and that is at 2.7%.
00:57The last line is the reason for not cutting.
00:59Unemployment will be lower than they thought.
01:02But the extent of disinflation trumped the tighter labour market.
01:06The Aussie dollar was all over the place after the decision.
01:08It fell beforehand, presumably because opinion was firming for a cut,
01:12but then it went up, down and up again.
01:15Punters obviously had no idea what to make of the statement.
01:18In the wash-up, it's changing hands for 63.5 US cents,
01:22which is a little bit on the day.
01:24Westpac was out of the blocks
01:26with its rate-cut announcement in one minute,
01:28and Commonwealth Bank and NAB followed in quick succession.
01:31But ANZ took 23 minutes.
01:33They were in no hurry.
01:35Will we or won't we?
01:36Or else someone was on the loo, couldn't be reached.
01:40The banks all got sold off today,
01:42which brought the share market down by 0.6%.
01:44And finally, the Russian ruble is getting a bid
01:47on the prospect of peace and an end to sanctions.
01:50It soared from a bit less than 1 US cent
01:53to a bit more than 1 US cent.