1 00:00:00,080 --> 00:00:01,880 Speaker 1: To Reserve Bank day to day. Of course, given our 2 00:00:01,920 --> 00:00:04,760 Speaker 1: straightened economic circumstances, we have the increased level of interest 3 00:00:04,800 --> 00:00:06,960 Speaker 1: in one a cut to the possibility of more cuts 4 00:00:06,960 --> 00:00:09,479 Speaker 1: than three. The commentary associated with the cut, Mike Jones 5 00:00:09,480 --> 00:00:13,239 Speaker 1: has been Zaids chief economists back with us, Mike Morning mording, Mike, 6 00:00:13,320 --> 00:00:14,160 Speaker 1: you at twenty. 7 00:00:13,920 --> 00:00:17,200 Speaker 2: Five, we are We're like, we're in the consensus. We're 8 00:00:17,200 --> 00:00:21,720 Speaker 2: picking twenty five and maybe a small downgrade to the 9 00:00:21,760 --> 00:00:24,880 Speaker 2: Bank's forecast of where they see the OARCO going from here. 10 00:00:24,720 --> 00:00:28,520 Speaker 1: With twenty five more to come, Well, we think. 11 00:00:28,920 --> 00:00:31,640 Speaker 2: We might get two more twenty five point cuts after this, 12 00:00:31,760 --> 00:00:34,000 Speaker 2: so that takes the official cast rate down to two 13 00:00:34,320 --> 00:00:37,640 Speaker 2: seventy five. But I think for today it's really going 14 00:00:37,680 --> 00:00:40,080 Speaker 2: to be how the bank frames up the outlook. And 15 00:00:40,440 --> 00:00:43,080 Speaker 2: what we're seeing from central banks globally is that have 16 00:00:43,120 --> 00:00:46,000 Speaker 2: been pretty reluctant to hate anything too firm about the future. 17 00:00:46,040 --> 00:00:47,680 Speaker 2: Giving the environment, now, how do. 18 00:00:47,640 --> 00:00:50,680 Speaker 1: You make that call? So new governor temporary, but nevertheless, 19 00:00:50,680 --> 00:00:53,480 Speaker 1: a new governor, new personality does come from a committee. 20 00:00:53,479 --> 00:00:58,400 Speaker 1: But given everyone's reluctant to say anything specific, why would 21 00:00:58,480 --> 00:00:59,480 Speaker 1: we expect them to. 22 00:01:01,000 --> 00:01:02,840 Speaker 2: I don't think they will you know, I think it's 23 00:01:03,360 --> 00:01:05,640 Speaker 2: probably enough for this meeting to the bank for the 24 00:01:05,680 --> 00:01:08,959 Speaker 2: bank to simply deliver on the guidance that they've been 25 00:01:09,160 --> 00:01:11,520 Speaker 2: telling us, which is another twenty five point cut, and 26 00:01:11,560 --> 00:01:15,120 Speaker 2: then indicate that the general direction is still lower and 27 00:01:15,200 --> 00:01:16,920 Speaker 2: more or less leave it at that. I mean, that 28 00:01:17,280 --> 00:01:19,440 Speaker 2: seems to be the playbook offshore, and it allows them 29 00:01:19,520 --> 00:01:22,080 Speaker 2: just to take things as they come and turn up 30 00:01:22,080 --> 00:01:24,640 Speaker 2: to the next meeting and assess the lay of the 31 00:01:24,720 --> 00:01:25,400 Speaker 2: land at that point. 32 00:01:25,800 --> 00:01:28,720 Speaker 1: The shadow board which I was reading yesterday, everything from 33 00:01:29,000 --> 00:01:31,280 Speaker 1: no move at all to twenty five by the bulk 34 00:01:31,440 --> 00:01:34,760 Speaker 1: two fifty. If the economists can't agree, how does the 35 00:01:34,840 --> 00:01:36,399 Speaker 1: Reserve bank and how do we know they're right? 36 00:01:38,800 --> 00:01:43,960 Speaker 2: It's a fair question. I think it's probably that difference 37 00:01:43,959 --> 00:01:46,720 Speaker 2: in opinion is indicative of where we are in the cycle, 38 00:01:46,720 --> 00:01:49,240 Speaker 2: which is we're probably getting to the point or getting 39 00:01:49,240 --> 00:01:52,200 Speaker 2: to that low point where the bank might stop cutting 40 00:01:52,320 --> 00:01:54,559 Speaker 2: for a while and assess the lay of the land. 41 00:01:54,600 --> 00:01:56,760 Speaker 2: And at those turning points you tend to get a 42 00:01:56,760 --> 00:02:00,480 Speaker 2: bit more disagreement about what the path from here will 43 00:02:00,640 --> 00:02:02,440 Speaker 2: look like. And it just goes back to what we 44 00:02:02,560 --> 00:02:04,640 Speaker 2: just talked about, which is, well, I think to give 45 00:02:04,760 --> 00:02:08,160 Speaker 2: firm guidance at this point is difficult, and that's why 46 00:02:08,200 --> 00:02:11,640 Speaker 2: the bank probably just refrain from doing so this afternoon. 47 00:02:11,840 --> 00:02:14,640 Speaker 1: This creeping thing I'm seeing around the world that's applicable 48 00:02:14,680 --> 00:02:16,960 Speaker 1: here as well, just a little bit more inflation, bit more, 49 00:02:17,040 --> 00:02:19,320 Speaker 1: bit more, bit more. How much does that worry them, 50 00:02:19,360 --> 00:02:21,960 Speaker 1: given that's their reason for begging. 51 00:02:23,760 --> 00:02:26,120 Speaker 2: I think it's an annoyance for them. Of course they 52 00:02:26,200 --> 00:02:31,480 Speaker 2: prefer those short term indicators for inflation to flatish or lower. 53 00:02:31,520 --> 00:02:33,040 Speaker 2: But I don't think we're at the point where it's 54 00:02:33,080 --> 00:02:37,400 Speaker 2: where it's a major worry. We think inflation is still 55 00:02:38,720 --> 00:02:42,160 Speaker 2: well contained and likely to stay in that target range 56 00:02:42,280 --> 00:02:43,960 Speaker 2: for the RBS, even they're going to be much more 57 00:02:43,960 --> 00:02:47,560 Speaker 2: concerned about the medium term inflation trend, which at the 58 00:02:47,560 --> 00:02:50,120 Speaker 2: moment is being suppressed by by pretty weak growth here 59 00:02:50,200 --> 00:02:52,959 Speaker 2: and the flow down we're seeing offshore and global growth. 60 00:02:53,080 --> 00:02:55,399 Speaker 1: What about the funk that we're in from the political 61 00:02:55,440 --> 00:02:57,560 Speaker 1: side of this, and it cuts good because your mortgage 62 00:02:57,639 --> 00:02:59,480 Speaker 1: goes down and I go spend some money and we 63 00:02:59,520 --> 00:03:02,200 Speaker 1: all get back to Christmas time. The role of that, 64 00:03:04,639 --> 00:03:08,320 Speaker 1: the confidence impact, yeah. 65 00:03:07,120 --> 00:03:09,200 Speaker 2: Yeah, I mean that's a big part of part of it, 66 00:03:09,200 --> 00:03:14,400 Speaker 2: I think, and that's why I think perhaps the bank today, 67 00:03:14,400 --> 00:03:17,760 Speaker 2: the Reserve Bank, can be seen as providing a little 68 00:03:17,800 --> 00:03:22,040 Speaker 2: bit of certainty in an otherwise extremely uncertain world by 69 00:03:22,560 --> 00:03:26,520 Speaker 2: as we talked about doing or fulfilling the forward guidance cutting, 70 00:03:27,000 --> 00:03:29,079 Speaker 2: saying they're going to cut again. I think that's providing 71 00:03:29,919 --> 00:03:34,360 Speaker 2: borrowers and lenders alike with a bit more confidence than 72 00:03:34,400 --> 00:03:35,320 Speaker 2: they might have otherwise said. 73 00:03:35,520 --> 00:03:37,360 Speaker 1: Right, we'll be watching with a great deal of interest. 74 00:03:37,400 --> 00:03:39,440 Speaker 1: Might appreciate it. Mike Jones, B and Z chief economists 75 00:03:39,440 --> 00:03:39,840 Speaker 1: this morning. 76 00:03:40,240 --> 00:03:43,160 Speaker 2: For more from the Mic Asking Breakfast, listen live to 77 00:03:43,240 --> 00:03:46,320 Speaker 2: news talks it'd be from six am weekdays, or follow 78 00:03:46,360 --> 00:03:47,920 Speaker 2: the podcast on iHeartRadio.