No one was shocked on Tuesday to hear the Reserve Bank of Australia did not cut rates, but reading the economic tea leaves (that is, the RBA board statement), it would appear the belief a rate cut would happen after the rise in the unemployment rate was misguided. They really had no intention of lowering rates at all.
In the end, even the 7% chance the market gave of a rate cut on Tuesday was overstating it. The governor of the Reserve Bank, Michele Bullock, told reporters the RBA monetary policy board didn’t even discuss cutting rates.
