The good news for investors from the latest Reserve Bank policy decision is that our esteemed central bank still sees the economy as comfortably in the “sweet spot”.

What’s the sweet spot? It’s where the economy is growing strongly, but due to lingering spare economic capacity, overall economic conditions are still not tight enough to generate untoward growth in wages and prices. In other words, although the rate at which our economy is growing is pretty good, the overall level of activity is still not as high as it could be.