As the link to the article below shows, the RBA are trying to steer the economy with monetary policy akin to driving a car while looking in the rear view mirror. Given flawed economic assumptions, and an over-reliance on lagging indicators, they have no option but to cause maximum harm at key market turning points.
But if you want to know which way the RBA will go next on interest rates, just look at the market. Given banks are starting to cut their fixed rates, and bond yields have declined again, the RBAs next move will be a rate cut as it follows the market. And as the next more severe wave of global crises unfold (as per my previous post) then the RBA will merely follow the market, reluctantly & belatedly, by slashing the cash rate moving forward. And even if the RBA's OCR is slashed to near 0%, bank margins of 3-4% or more are still likely on increased international wholesale funding costs & increased non-performing loans. Only then will the RBA, and indeed central banks around the world, be exposed as the impotent market followers, not leaders, they really are.
