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Speaker 1: Well that ends AI report yesterday was more bad news.

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Speaker 1: Does it mean we get a fifty off today or

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Speaker 1: are we still going with twenty five points? It's ocyr day.

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Speaker 1: Sharon's on the A and Z Chief economist Sharon, good morning,

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Speaker 1: Good morning. What do you I know, what you think

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Speaker 1: they should do, but what do you reckon they'll do.

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Speaker 2: Yeah, we're plumping for a twenty five point cut, but

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Speaker 2: it is looking like a close run thing. It wouldn't

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Speaker 2: be difficult to just fire a larger cut, But at

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Speaker 2: the end of the day, we think, when it's so uncertain,

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Speaker 2: probably go with strategy. And the fact is the rate

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Speaker 2: to come down a long way. We're just heading to

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Speaker 2: the spring period for the housing market. The next six

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Speaker 2: weeks of data are going to tell you a lot

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Speaker 2: about what the rebound looks like. And we think a

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Speaker 2: twenty five point cut while signaling that you're absolutely ready

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Speaker 2: to do what's needed. You've got another meeting in just

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Speaker 2: six weeks. That kind of leaves the most options open.

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Speaker 2: So that's really why we're plumping for twenty five rather

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Speaker 2: than having a strong view about the economics of it,

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Speaker 2: because yeah, the data has been a little bit rubbish.

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Speaker 2: We had obviously that week data for the GENP in

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Speaker 2: the second quarter of the year, that can be very volatile.

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Speaker 2: It can also be revised hugely. But then we had

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Speaker 2: the quarterly Survey Business Opinion yesterday, which is only one

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Speaker 2: indicator for how the economy has gone in the next

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Speaker 2: three months, but it wasn't a particularly good one.

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Speaker 1: Sharing. Isn't this part of the problem that we keep saying, Oh,

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Speaker 1: there's another meeting in six weeks, we'll just wait for

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Speaker 1: more data, wait for more data, and you missed the boat.

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Speaker 2: That's always the risk. You can never eliminate the trade

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Speaker 2: off between exactly that risk of being too slow and

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Speaker 2: then the risk of overshooting or flip flopping and causing

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Speaker 2: unnecessary volatility. Those two risks are ever present. But the

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Speaker 2: fact is, you know, the ocr is a lot closer

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Speaker 2: to its bottom than its top. It's come all the

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Speaker 2: way down from five and a half and an August

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Speaker 2: was that that was forecasting at two and a half

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Speaker 2: it would be the bottom. Maybe it'll be two and

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Speaker 2: a quarter, could even be two. But anyway, the point

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Speaker 2: is we're nearly there. So the driving instructors stay, you

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Speaker 2: should put your foot down, just as your approach for turn.

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Speaker 2: So I guess our assumption is that at risk of

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Speaker 2: other flip flop and overshooting will be higher in the

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Speaker 2: minds of the committee than the risk of being too

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Speaker 2: slow at this point of the cycle. But really, it

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Speaker 2: wouldn't be difficult for them to justify share remove Sharon,

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Speaker 2: they were forecasting it to get to two and a

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Speaker 2: half anyway.

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Speaker 1: They were now very quickly because we've got to go.

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Speaker 1: But I just wanted for people listening to this, We've

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Speaker 1: got a mortgage. If we go fifty instead of twenty

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Speaker 1: five today, what does that actually change for me? Or

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Speaker 1: of these numbers already been priced in.

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Speaker 2: A lot is priced in, but the fifty is not

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Speaker 2: fully priced. So the market's also a bit on the fence,

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Speaker 2: so you'd expect to see the oven. Well, the other

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Speaker 2: night rate will certainly drop more the one year rate.

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Speaker 2: That will depends very much on how the Reserve Bank.

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Speaker 2: It's see what the words they use them, how the

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Speaker 2: market interprets that. Really, I think the Reserve Bank's aim

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Speaker 2: will be to not cause too much of a splash,

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Speaker 2: but that'll be difficult when everyone's got next expectations.

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Speaker 1: Sharon'solm A and Z appreciate your time, Thanks so much

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Speaker 1: for it.

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Speaker 2: More from Early Edition with Ryan Bridge.

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