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Speaker 1: The official cast rate has had six cuts in a row.

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Speaker 1: Will this end today? It's widely expected to hit pause,

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Speaker 1: but a cut is not off the cards. A and

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Speaker 1: Z and chief economist Sharon's on has got up early

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Speaker 1: for us. Hello Sharon good Running. Two days ago I

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Speaker 1: suggested a cut of twenty five basis points to a

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Speaker 1: flat three might give the morrimond parts of our economy

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Speaker 1: a bit of a g up for summer. Was that

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Speaker 1: a silly idea?

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Speaker 2: No, not at all. In fact, you know we're on

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Speaker 2: record of saying, actually, we think a cut is justified.

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Speaker 2: Wouldn't be a bad idea. What we've seen in a

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Speaker 2: wide range of data actually is that things have just

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Speaker 2: started to roll over a bit in the last few months.

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Speaker 2: And in fact, the reserve banks on shiny new toy,

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Speaker 2: the DVP now indicator, is producing a chance that GDP

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Speaker 2: actually have gone backwards in the last months of this year.

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Speaker 2: So in our mind that kind of more than offsets

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Speaker 2: the fact that GDP in the first three months was

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Speaker 2: stronger than they thought. That we actually think that matters

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Speaker 2: quite a bit. That momentum is play failing little bit

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Speaker 2: at the moment.

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Speaker 1: Can we just talk about that. I've been actually watching

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Speaker 1: that Reserve back now Cast app which is on their website,

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Speaker 1: and it gives a real time indication of GDP and

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Speaker 1: it's saying the economy fell back into contraction in the

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Speaker 1: June quarter. Is that app accurate? Do you think it's

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Speaker 1: readings are real? Are we falling back into contraction?

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Speaker 2: Well, it's not new and so far as it's just

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Speaker 2: rolling together all the indicators the Reserve bankbooks at anyway,

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Speaker 2: but it is kind of in your face, and so

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Speaker 2: you can't rule out that it might impact the committee

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Speaker 2: just by the fact that it's not their official GDP forecast.

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Speaker 2: They have their own forecasters who will take that into account,

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Speaker 2: but everything else as well. But our own forecast is

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Speaker 2: kind of zero point one positive.

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Speaker 1: Sorry, So did you say zero point one?

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Speaker 2: That's what we're our current forecast for the second quarter

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Speaker 2: as a positive.

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Speaker 1: Let's just call the zero amongst friends, shall we?

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Speaker 2: Yeah, exactly. I think that's some timely reasonable. Yeah, So

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Speaker 2: it does look like the economy more or less went

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Speaker 2: nowhere in the last three months that we've just finished.

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Speaker 1: And yet do you think they will not do anything today?

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Speaker 2: Well, they don't have a GDP target, but they don't

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Speaker 2: have an employment target. Either they've got an inflation target.

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Speaker 2: And in May there was one member of the committee

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Speaker 2: who felt pretty strongly they shouldn't have cuts back then,

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Speaker 2: and actually they couldn't reach consensus to cut. They had

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Speaker 2: to hold a vote, which is actually quite unusual. They

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Speaker 2: do prefer to all agree the very Zalan way, but

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Speaker 2: they couldn't. So it's particularly tricky one to call because

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Speaker 2: they're trying to guess not just what a committee will think,

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Speaker 2: but ultimately you know, this one holdout. How are they

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Speaker 2: feeling now? There was a mention in the summary record

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Speaker 2: of meeting last time that it was concerned about inflation

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Speaker 2: expectations and inflation generally, that the lingering inflation could come back,

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Speaker 2: that the members could catch fire again. We can see

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Speaker 2: why those concerns exist. There's certainly sticky parts of inflation,

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Speaker 2: but basically in the bigger picture, we think those concerns

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Speaker 2: will be alleviated rather than will intensify.

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Speaker 1: Well, Charon, thank you so much for your advice today.

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Speaker 1: Certainly it feels like inflation is rusted in. I mean,

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Speaker 1: look at your rates bill.

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Speaker 2: Eh For more from early edition with Ryan Bridge, listen

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