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Speaker 1: The Reserve Bank is going to consider the official official

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Speaker 1: cash rate again tomorrow. It's five and a half percent.

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Speaker 1: It's been there for a year and a half. Gareth

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Speaker 1: Kiernan is Infametric's chief forecaster in for Brad Olsen Tonight, Hey, Gareth, evening, Heather.

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Speaker 1: Obviously nothing's going to change, it's the commentary we're interested

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Speaker 1: and what are you looking for there?

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Speaker 2: Yeah, for us, it'll be looking at the responses that

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Speaker 2: the Reserve Bank has to a couple of key indicators

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Speaker 2: or things that come out over the last six weeks

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Speaker 2: since the previous review. Firstly, the budget, which was probably

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Speaker 2: a bit less contractionary than people have been anticipating, so

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Speaker 2: the Reserve Bank had previously expressed some concern about just

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Speaker 2: how much more stimulitary government policy might be. And the

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Speaker 2: second one is last week's quarterly survey Business Opinion, where

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Speaker 2: business confidence was well down. But probably more importantly, there

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Speaker 2: are a couple of key indicators and they're showing that

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Speaker 2: the labor market is deteriorating further and also that inflation

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Speaker 2: does those cost and prices and pricing pressures do seem

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Speaker 2: to be easing. Inflation due out next week and be

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Speaker 2: closer to three percent and four percent, which is good news.

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Speaker 1: If the Reserve I mean, what the Reserve Bank's been

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Speaker 1: doing up to now, Gareth obviously, is that they've been

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Speaker 1: jaw boning pretty hard and making it sound like there's

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Speaker 1: even the possibility of another right rate hike in some instances.

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Speaker 1: They surely cannot keep that tone up when the economy

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Speaker 1: is in the state that it is at the moment,

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Speaker 1: can they?

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Speaker 2: Yeah, I fully agree with you there. I mean, we

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Speaker 2: were surprised at the previous review where they had talked

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Speaker 2: about the possibility of a rate rise. The difficulty for

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Speaker 2: us is, even even with tomorrow's review, they have tended

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Speaker 2: to flip flop from sort of one message to another

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Speaker 2: from meeting to meeting, So we won't be reading too

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Speaker 2: much into necessarily the tone. Initially, we'll sort of, you know,

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Speaker 2: hold fire and see how the following one goes as well.

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Speaker 2: But also he will be the inflation and the labor

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Speaker 2: market data that come out over the next couple of

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Speaker 2: weeks whether that does confirm some of those sort of

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Speaker 2: weaker readings that have been coming through.

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Speaker 1: And you're still picking November before a can.

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Speaker 2: No, We've pushed out to February we did that, I

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Speaker 2: think following their most their previous meeting where they know

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Speaker 2: we're still talking about rate rises. We think November probably

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Speaker 2: given how the economy is evolving, would be appropriate. But

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Speaker 2: our worries the Reserve Bank pretty backward looking in terms

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Speaker 2: of how they're setting policy. You know, we're pretty vocal

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Speaker 2: in terms of on the way up, they need to

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Speaker 2: move faster, and we're sort of feeling sort of a

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Speaker 2: bit like history repeating itself at the moment where they

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Speaker 2: may be a bit slow on the way down as well.

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Speaker 1: Yeah, Hey, really good to talk to you as always, Gareth,

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Speaker 1: really appreciate it.

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Speaker 2: Mate.

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Speaker 1: There's Gareth you and chief forecast r it In for Metrics.

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