It really is “take your pick” on the outlook for the Reserve Bank of Australia on Tuesday’s (February 3) monetary policy meeting and for the balance of 2015.

I posted earlier on an article saying “the chances are it will cut”

But … from another article in the same newspaper (Sydney Morning Herald) the headline is the cash rate will be steady throughout 2015 (though there is big variation in the calls … read on).

In brief:

  • BusinessDay forecasting panel is predicting a second year that the Reserve Bank (will) go a year without a moving its cash rate
  • Over time (the panel) average forecasts have proved to be more reliable than those of any of its members
  • Their average forecast is for a cash rate of 2.41% by December (currently its 2.5%) … meaning they believe a cut is more likely than an increase

There is considerable variation, though:

  • Bill Evans of Westpac, James McIntyre of Macquarie Group (says Australia is already in a per capita “demand recession”), and Stephen Anthony of the consultancy Macroeconomics expect two cuts within months
  • Steve Keen and Alan Oster (NAB) expect one interest rate cut in the first half of the year, followed by another in the second
  • Michael Workman of the Commonwealth Bank and Annette Beacher of TD Securities expect two hikes late in the year
  • Saul Eslake (ANZ) and Chris Caton (BT) … expecting steady rates all year. Eslake says the Reserve Bank will want to avoid cutting to leave something “up its sleeve'” in the event of another global shock. He says it’s not clear that another cut of 25 or even 50 points would achieve what cuts of 225 points between November 2011 and August 2013 did, which is a lower unemployment rate. Caton says although he is not expecting it, the bank will be forced to cut if the unemployment rate goes through 6.5 per cent “with any velocity”

There is more here, its ungated: 2015 BusinessDay Economic Survey: Economy weak, cash rate steady

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Like I said earlier …

I’ll have more on the RBA ahead of Tuesday’s decision (its gonna be hard to shut me up about it, TBH)

The Reserve Bank of Australia announcement is due at 0330GMT on Tuesday February 3