MNI BRIEF: RBA's Hauser Says Market Overestimated July Cut

The market had overestimated the chance of a cut at the July meeting due to significant global uncertainty and its impact on the Reserve Bank of Australia Board’s outlook, Deputy Governor Andrew Hauser told an industry forum on Thursday.

“To some extent, what we're going to tell you is, ‘look, we're uncertain,’” Hauser said, referencing the board’s surprise decision to hold the cash rate at 3.85%. (See MNI RBA WATCH: Board Shocks With Hold As Trade Fears Ease)

“We're feeling our way. It's a board decision on individual decisions, so the irreducible uncertainty of policy making is something I think we're all getting a little bit more comfortable with." An unpredictable board will not be the norm, he added. 

Hauser said market pricing was typically sensible and that instances where it had misjudged the outcome generally coincided with significant global upheaval. “So let's not declare this to be some sort of catastrophe... there were some very specific challenges that date back to May, rather than July.”