By Lisa Llewellyn & Will Keall
How could 24 out of 27 economists have gotten it so wrong? The odds were on for the Reserve Bank to cut interest rates at the February Board meeting, but the decision to keep rates on hold certainly had people scratching their heads.
There are a number of reasons why the Reserve Bank defied expectations.
In the absence of a Reserve Bank Board meeting in January, a rate cut this month would have meant a hat trick of rate cuts. But this would have sent a message about the state of affairs in the Australian economy that the RBA did not want to be sending – despite it seeming to be open to further cuts in the near future.
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