Greg Jericho

The Governor is asked about the RBA’s “technical” assumption of the cash rate cut in the Statement of Monetary Policy and whether the bank should be tempering expectations.

That assumption is purely put in to show what the market is expecting, it is NOT the RBA’s estimate. And yet every month she gets asked about this. Sigh

She then is asked a very good question about whether cutting rates was considered and were anyone worried about rising unemployment.

She says no – they only thought about keeping them steady. She says “Unemployment went up a little more than expected, but so did inflation. We are being a little cautious here as to what we read. We think there is a little information in both. Naturally, the board are concerned about employment as well because that is part of their mandate, but I would say at the moment we are a little more concerned about making sure we get inflation sustainably back in the band.”

So yes, as we noted in our media release, the RBA cares more about inflation than unemployment