1 00:00:00,160 --> 00:00:02,120 Speaker 1: Right. The Reserve Bank was extra interesting for a couple 2 00:00:02,160 --> 00:00:03,880 Speaker 1: of reasons. One we've built a new governess, she's with 3 00:00:03,960 --> 00:00:06,280 Speaker 1: us shortly, and two it's their first outing of the year. 4 00:00:06,320 --> 00:00:08,480 Speaker 1: Of course, cash right, too too far, that wasn't the news. 5 00:00:08,480 --> 00:00:11,200 Speaker 1: The word duvish was used by some Brad Olsen as 6 00:00:11,200 --> 00:00:13,840 Speaker 1: the chief executive, of course, principal economist and informetrics and 7 00:00:13,840 --> 00:00:17,560 Speaker 1: with us Brad morning, good morning. This lars a fair attitude. 8 00:00:17,600 --> 00:00:19,320 Speaker 1: She seems to have. Inflation Is that going to pop 9 00:00:19,400 --> 00:00:21,200 Speaker 1: right back into the box the way she seems to 10 00:00:21,200 --> 00:00:21,880 Speaker 1: indicate it will? 11 00:00:23,160 --> 00:00:26,080 Speaker 2: Well, that's the Reserve banks expectations. They've said pretty clearly 12 00:00:26,120 --> 00:00:29,520 Speaker 2: that they are confident that inflation will be back within 13 00:00:29,560 --> 00:00:31,800 Speaker 2: the box within the current quarter and then back to 14 00:00:31,840 --> 00:00:35,680 Speaker 2: two percent within the next twelve months. Again, I'm hopeful 15 00:00:35,680 --> 00:00:37,240 Speaker 2: of that, but the bank did seem to be a 16 00:00:37,280 --> 00:00:40,440 Speaker 2: little bit less phase than we probably were expecting, with 17 00:00:40,600 --> 00:00:42,800 Speaker 2: having inflation out the top of the band and just 18 00:00:42,800 --> 00:00:45,200 Speaker 2: some of the pressures that are sitting there. In fact, 19 00:00:45,240 --> 00:00:48,080 Speaker 2: the bank said quite specifically that they thought that risks 20 00:00:48,080 --> 00:00:51,199 Speaker 2: to the inflation outlook were balanced. There's both potential for 21 00:00:51,240 --> 00:00:54,360 Speaker 2: a bit more pressure if the economy started to keep 22 00:00:54,400 --> 00:00:57,240 Speaker 2: going a bit quicker, But equally there's the ability for 23 00:00:57,280 --> 00:01:00,280 Speaker 2: inflation to fall away quite a bit quicker if the 24 00:01:00,320 --> 00:01:03,520 Speaker 2: economic recovery started to stall. Now I'm sort of more 25 00:01:03,560 --> 00:01:06,560 Speaker 2: of the view that there's probably upside risk. It's more 26 00:01:06,640 --> 00:01:08,520 Speaker 2: likely to be worse than it is to get better. 27 00:01:09,000 --> 00:01:11,840 Speaker 2: But the Bank's got a slightly different view. Importantly, they 28 00:01:11,880 --> 00:01:15,360 Speaker 2: haven't changed anything particularly. They haven't, you know, completely whip swored. 29 00:01:15,360 --> 00:01:17,440 Speaker 2: They have just provided a little bit more of a 30 00:01:17,480 --> 00:01:20,360 Speaker 2: guidance around where interest rates might go over the next year. 31 00:01:20,520 --> 00:01:23,039 Speaker 1: Do you think that's a Bremen thing? In other words, 32 00:01:23,080 --> 00:01:25,399 Speaker 1: she in her heart of hearts goes, I don't want 33 00:01:25,400 --> 00:01:27,840 Speaker 1: to scare any horses on my first time out. Let's 34 00:01:27,920 --> 00:01:29,640 Speaker 1: just walk a tight rope, say a bit of this 35 00:01:29,680 --> 00:01:31,000 Speaker 1: and a bit of that, and we'll see how we go. 36 00:01:31,080 --> 00:01:31,800 Speaker 1: Is there anything in that? 37 00:01:32,800 --> 00:01:35,520 Speaker 2: I think the governor is just generally playing with a 38 00:01:35,520 --> 00:01:37,840 Speaker 2: pre straight bat. She's also got a wider committee. It's 39 00:01:37,840 --> 00:01:39,960 Speaker 2: not just the one person who makes the decision on 40 00:01:40,360 --> 00:01:43,600 Speaker 2: how things are communicated. But even in her press conference yesterday, 41 00:01:43,600 --> 00:01:46,280 Speaker 2: I think she tried to highlight all the different challenges 42 00:01:46,319 --> 00:01:48,040 Speaker 2: that are out there that the Reserve Bank's got to 43 00:01:48,040 --> 00:01:50,720 Speaker 2: grapple with I mean, it is a real toss up, 44 00:01:50,760 --> 00:01:53,520 Speaker 2: if you will, given that the economy still doesn't feel 45 00:01:53,560 --> 00:01:56,760 Speaker 2: like it's fully got that recovery momentum. The Reserve Bank 46 00:01:56,840 --> 00:01:58,520 Speaker 2: doesn't want to cut that off at the knees too 47 00:01:58,600 --> 00:02:02,320 Speaker 2: quickly by speeding anyone. But equally they have got to 48 00:02:02,360 --> 00:02:04,600 Speaker 2: always be sort of focused on inflation. So it's a 49 00:02:04,600 --> 00:02:06,800 Speaker 2: tricky balance, and I think the Governor actually played it 50 00:02:07,000 --> 00:02:09,639 Speaker 2: very well. It's a pretty straight bat. Everyone can get 51 00:02:09,680 --> 00:02:12,280 Speaker 2: something out of it. It was ever so slightly duvish 52 00:02:12,280 --> 00:02:15,000 Speaker 2: relative to expectations, but I don't think we should read 53 00:02:15,040 --> 00:02:17,280 Speaker 2: too much into that. It wasn't the big pivots that 54 00:02:17,280 --> 00:02:18,400 Speaker 2: we've had in previous years. 55 00:02:18,480 --> 00:02:20,079 Speaker 1: You're still calling Lake this year for a hike. 56 00:02:21,200 --> 00:02:23,880 Speaker 2: At the moment, yes, December seems to be that the 57 00:02:24,080 --> 00:02:26,400 Speaker 2: likely month. Markets are picking a bit earlier, sort of 58 00:02:26,440 --> 00:02:29,760 Speaker 2: September October, and I could see that happening. I don't 59 00:02:29,760 --> 00:02:32,120 Speaker 2: think it's any earlier than that, But I also don't 60 00:02:32,120 --> 00:02:33,799 Speaker 2: know if the Reserve Bank will be able to wait 61 00:02:33,840 --> 00:02:36,440 Speaker 2: it out till twenty twenty seven. At some point those 62 00:02:36,480 --> 00:02:39,800 Speaker 2: inflationary pressures and realities will come through, especially if the 63 00:02:39,840 --> 00:02:42,720 Speaker 2: economic recovery does get going, which would be a good thing, 64 00:02:43,000 --> 00:02:45,400 Speaker 2: but they will need to normalize interest rates and get 65 00:02:45,440 --> 00:02:47,480 Speaker 2: it back to that Goldilock zone where they're not adding 66 00:02:47,520 --> 00:02:50,320 Speaker 2: anything specific to the economy, but they're not taking away 67 00:02:50,400 --> 00:02:53,440 Speaker 2: anything either. That's a happy balance, and we're getting closer, 68 00:02:53,480 --> 00:02:54,720 Speaker 2: but we're clearly not there. 69 00:02:54,600 --> 00:02:57,400 Speaker 1: Yet, Bradley. It has little short of shearer joy as always, 70 00:02:57,440 --> 00:02:59,400 Speaker 1: brad Olsen out of infometrics this morning. 71 00:03:00,080 --> 00:03:03,080 Speaker 2: More from the Mic Asking Breakfast. Listen live to News 72 00:03:03,120 --> 00:03:06,040 Speaker 2: Talk Set B from six am weekdays, or follow the 73 00:03:06,080 --> 00:03:07,519 Speaker 2: podcast on iHeartRadio.