No one was shocked on Tuesday to hear the Reserve Bank of Australia did not cut rates, but reading the economic tea leaves (that is, the RBA board statement), it would appear the belief a rate cut would happen after the rise in the unemployment rate was misguided. They really had no intention of lowering rates at all.

In the end, even the 7% chance the market gave of a rate cut on Tuesday was overstating it. The governor of the Reserve Bank, Michele Bullock, told reporters the RBA monetary policy board didn’t even discuss cutting rates.

I suggested last week the RBA was rather sanguine about the rise in unemployment, and so it was. The updated unemployment estimates in the November statement on monetary policy are for it to stabilise at 4.4% from now till the end of 2027 (even though it is currently 4.5%).

Bullock told the media on Tuesday that “the board are concerned about employment as well because that is part of their mandate, but I would say at the moment we are a little more concerned about making sure we get inflation sustainably back in the band”. The only aspect I would quibble with is the “at the moment” part. It has........

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