Listen: Is the RBA misleading us, or are they confused themselves?

In a move that was disappointing to mortgagees, the Reserve Bank of Australia held interest rates on Tuesday.

It was the complete opposite of what major banks and economists predicted. So, what is going on with the RBA? Speaking with host Jacqueline Maley and chief political correspondent Paul Sakkal in a new Inside Politics podcast episode, our senior economics correspondent Shane Wright answers the question everyone is asking: Is the RBA misleading the public, or are the leaders within our central bank confused themselves?

Click the player below to listen to the full episode, or read on for an edited extract of the conversation.

Jacqueline Maley: On Tuesday, RBA head Michele Bullock and her colleagues dashed all our hopes, and she kept rates on hold at 3.85 per cent.

Pretty much all the banks and the economists were predicting a rate cut. Is the RBA misleading us, or are they just confused themselves?

Shane Wright: Or they’re confused with their communication skills, which is a key issue that’s coming up.

Maley: Wasn’t … the revamp of the RBA and these news/press conferences that they’re giving and their … new transparency, that was supposed to be all about better communication?

Wright: You’re exactly right, but whether they’ve mastered it is a completely different question at this point.

It was during the press conference, one of the most interesting bits was a reporter said, “Right, given that what everyone’s expecting, are you happy with the communication?”

And the response was: “Oh, no, we’re communicating well!”

Wright: Investors, people who’ve got hundreds of millions of dollars in the market, had bet you were going to cut rates. Every major bank, economist in the country, said you were going to cut rates. I think that’s the evidence that the … communication breakdown, to quote Led Zeppelin there.

Elsewhere in the episode, Maley, Sakkal and Wright discuss Australia’s alliance with Donald Trump’s America and the implications for AUKUS, and the confusing matter of yet more US tariffs on Australian goods. Listen to the full episode here.

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