Comments by RBA board member, Ian Harper, to the WSJ

  • Lags in monetary policy have always been long and variable
  • In this environment, you don't want to jump the gun (with more rate cuts)
  • You don't want to be in a place where you are overstimulated
  • A lot of what we are seeing is globally induced
  • The minutes showed the RBA is prepared to cut again if necessary
  • The question is, is it necessary?

My favourite comment of his from the article though has to be this:

"It's not as if we have done nothing at all. It will take a little time for the remedy to work."

I mean, it's not about doing nothing but when they actually did decide to pull the trigger, it was probably a little too late already. Hence, they're actually playing catch up with regards to trying to let monetary policy do its work on the real economy.

If things continue down this path over the next two months, I don't see how they can escape a February rate cut or even seek to justify not having to do so.