cash rate

The RBA cut rates, but was cautious in signalling more cuts given underlying inflation is no longer forecast to hit the 2½% target.

NZ remained in recession at the end of last year, with unemployment rising above 5% and employment falling again in Q4.

Updated RBA estimates of spare capacity suggest that demand still exceeds supply, both in terms of activity and the labour market.

US economic outperformance reflects superior labour productivity, while Australia continues to be powered by strong population growth.

A senior RBA official has acknowledged that there is "no evidence that monetary policy ... is more potent in Australia than ".

The RBA has highlighted how policy is less tight than other countries, such that inflation is higher than in nearly all its peers.

The RBA never raised rates by as much as other countries, so it has relatively less scope to cut them in a soft economic landing.

The RBA optimistically expects inflation will return to target without spare capacity emerging in the economy.

The RBA is alert to the possibility that eventual rate cuts might spur risky borrowing by already-heavily-indebted households.

The public sector has accounted for all the growth in GDP over the past year and made the largest contribution to strong jobs growth.