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Speaker 1: So the job's number and their link to the cash

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Speaker 1: wave from the Reserve Bank monetary call next week four

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Speaker 1: point six percent. It was below expectations, in other words,

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Speaker 1: not as bad as thoughts. So that would mean those

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Speaker 1: who argue for a cut in August are wrong, surely.

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Speaker 1: Infimetrics principle Economist Brad Olsen's back. Well, there's Brad, morning

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Speaker 1: to you.

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Speaker 2: Good morning.

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Speaker 1: I suppose one of the interesting things the divergence of

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Speaker 1: views we're getting from the economic community at the moment

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Speaker 1: gives you a sense of just how vexed all this is,

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Speaker 1: doesn't it, oh.

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Speaker 2: One hundred percent. I mean, you've got a couple of

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Speaker 2: banks that are picking an August cut, You've got another

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Speaker 2: that's picking in October and November cut, others who are

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Speaker 2: picking a November cut. Some of us still thinking, well,

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Speaker 2: either it could be February or honestly, who knows with

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Speaker 2: the Reserve Bank at that at this point, and that

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Speaker 2: really is the challenge. It's not actually so much that

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Speaker 2: we're all looking at the economic data and coming up

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Speaker 2: with different starts, that we're coming up and looking at

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Speaker 2: the economic data and going, what on earth do we

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Speaker 2: think the Reserve think is going to do, and the

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Speaker 2: fact that none of us quite know speaks a little

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Speaker 2: bit how inconsistent their messaging has been. You know, one

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Speaker 2: of the B and Z notes, I think it was

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Speaker 2: this week, sort of said, look, the thing is, the

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Speaker 2: propensity to surprise from the bank leaves them with a

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Speaker 2: huge degree of nervousness about the call that they don't know.

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Speaker 2: We don't know. We're all sort of grasping at straws

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Speaker 2: and just playing a waiting game.

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Speaker 1: August is off, isn't it. Surely anyone who argues August

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Speaker 1: is a possibility is dreaming, aren't they.

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Speaker 2: Well, the marks certainly think that it's one hundred percent on.

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Speaker 2: I think that is overblown, I mean, and the big

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Speaker 2: one for me is that it would take such a

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Speaker 2: huge reversal for the Reserve being who have gone in

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Speaker 2: May with their latest forecasts and said, look, you know

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Speaker 2: it's going to be August twenty twenty five for them

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Speaker 2: to now sort of turn around without really being able

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Speaker 2: to put out any additional forecast and say, look, we

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Speaker 2: were just so hopelessly wrong that we've now had to

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Speaker 2: bring forward things by a year. But that is also

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Speaker 2: sort of the challenge, right, even if they don't go

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Speaker 2: in August. They should be starting to lay the groundwork

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Speaker 2: now for a CAT. I don't think it'll be October

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Speaker 2: because I think they'll probably want to have the full

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Speaker 2: monetary policy statement, the ability to put out forecasts, and

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Speaker 2: a lot more context. But they're almost open up the

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Speaker 2: potential that maybe if it is in November, maybe it's

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Speaker 2: fifty bases points to start with, because again they're waiting

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Speaker 2: too long.

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Speaker 1: On their part, though, Brad, they can't go fifty. Think

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Speaker 1: of who you're dealing with. You're dealing with Adrian Ego

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Speaker 1: or he's not going to go what's there? It is

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Speaker 1: fifty folks, because everyone will go what well?

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Speaker 2: But remember that when the reserve vent did get through

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Speaker 2: their heads that inflation was more persistent and less transitory

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Speaker 2: than people were making it out to be a year

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Speaker 2: and a bit ago, two years ago, that's when they

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Speaker 2: did start to make those bigger moves. You know, you

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Speaker 2: saw a seventy five base point trigger pooled at once,

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Speaker 2: so I wouldn't discount it. But the big thing for

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Speaker 2: me is that they do need to explain why they

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Speaker 2: got it so wrong, because if you look at their forecast,

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Speaker 2: if you look at the data, they got unemployment picked

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Speaker 2: bang on. They got inflation at a headline level it

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Speaker 2: was slightly better. They got non tradables it was slightly

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Speaker 2: worse GDP bang on. All of the data broadly is

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Speaker 2: consistent with their view in May that it takes them

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Speaker 2: for August next year to do anything. So if they're

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Speaker 2: going to move, they don't have to say why they

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Speaker 2: stuffed up.

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Speaker 1: Yes, indeed, would they read the Westpac stuff and go

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Speaker 1: Q two Q three recession? In other words, there's a

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Speaker 1: recession coming. Would they look at go we don't need

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Speaker 1: a recession, don't want a recession. Maybe it's too late,

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Speaker 1: we need to do something. Would any of that making

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Speaker 1: any difference.

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Speaker 2: Or not to a degree? I think it would make

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Speaker 2: a difference. I think you know, if you look at

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Speaker 2: one or the other and less talked about figures for

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Speaker 2: esterdays that our unemployment release was the number of hours

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Speaker 2: worked in the economy that sort of fell fairly seeply

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Speaker 2: in a sense, so that highlights that, you know, you've

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Speaker 2: not only got job losses, but the people who are

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Speaker 2: still in jobs are also not you know, there's not

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Speaker 2: that much activity fully coming through from the economy, so

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Speaker 2: that will weaken it but again the Reserve Bank knows.

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Speaker 2: We all know that monetary policy doesn't work that quickly

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Speaker 2: yet take six, twelve, eighteen months. But again the Reserve

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Speaker 2: Bank knew that in May as well. It's not like

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Speaker 2: this is a new revelation. So again then like this

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Speaker 2: is the thing that I'm really struggling with is and

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Speaker 2: the reason that we add informetrics. We're not even readjusting

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Speaker 2: of you until we see what the Reserve Bank comes

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Speaker 2: out with this time, because in May they talked about

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Speaker 2: going up and pushing it out to August next year.

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Speaker 2: There if I review, they only got a bit of

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Speaker 2: text to give us that seemed to have a much

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Speaker 2: more sort of duvish hue. Maybe it is coming to

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Speaker 2: but honestly, I think we're all sort of flying blind

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Speaker 2: and we've got no idea.

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Speaker 1: Good on you, Brad. Always enjoy your company, Brad olsoen jeesu.

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Speaker 1: It's fun being a porn and a big game like

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Speaker 1: this isn't it? Ah, It's not like it's important or anything.

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Speaker 2: For more from the My Asking Breakfast listen live to

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Speaker 2: news talks there'd be from six am weekdays, or follow

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