Reserve Bank Decision - Cut rates 0.5%!!!!

Wow...Got that one wrong didn't I. I guess the business heads on the Reserve Bank Board were able to convince the rest that such a huge cut was warrented.

For mine, I do believe this was an emotional reaction to the inflationary figures. In my opinion, the economy that doesn't really deserve such stimulus, especially with the Carbon Tax due any minute now which will certainly add to price levels. Better to have waited to see the effect of that and then hit the monetary price lever.

A case in point is the recent Unemployment data which stated that seasonally adjusted unemployment dropped 0.2% to 4.9% for April (trend was unchanged at 5.1%). Hardly the figures for a looser monetary policy.

I think the Reserve go it wrong.

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