Mike's Minute: We were more right than the Reserve Bank

There are two key things for me that came out of the Reserve Bank commentary.  The press conference post the announcement should be a must watch for us all – the insight is invaluable.   On one hand, the genius three who turned up —Karen, Paul, and Christian— tell us that what they have done will flow through.  In other words, don't panic. "It will come through". I'll come back to that.  But then they tell you they got it wrong in Q2. There was less than no growth in the second quarter, but they didn’t see it.  So they're bullish in their talents on one hand, but hopelessly wanting on the other.  By the way, the vote 4-2 – that's never happened before. Two of the voters wanted a 50 point drop. I want to know who they are, because they would appear to get it.  What the confession of no growth in Q2 asks is if they had seen it, could they have done more?  Don’t answer that because the answer is yes, yes, yes, and yes. Now, because they botched it, they are most likely going down to 2.5% for the cash rate.  The other interesting thing for me is I'm a big believer in psychology. The economy is about much more than stats and data, it's about the mood and the vibe.  They talked of the cautious nature of our behaviour, I would argue they are part of the problem.  They look cautious. They look circumspect. They look like wonks who don’t get out a lot.  They certainly don't get out into the real world where the majority of us have been seeing the wreckage of our economy for most of the year.  They don’t vibe it and they don't sell it, which is not to say they are supposed to be show ponies, but my word, what a boring bunch they are, with spreadsheets for friends.  This economy needs a cheerleader. It needs a significant, impactive, influential, and loud voice for its merits. Hawkesby, Silk, and Conway aren't it.  It should have been 50 points, and it should have been 50 points before yesterday, and because it wasn’t, the economy stalled and they didn’t see it coming.  How does that install confidence?  So, there's at least two more cuts. But why are we waiting?  They will argue it's because the 25 points will flow through. Will they really?  Let the record show, to this point, we are more right than they are. See omnystudio.com/listener for privacy information.