- The board discussed other options but agreed on 25 bps as a standard move
- Does not preclude a bigger or smaller rate move in the future
- It is plausible that the neutral rate is positive
- RBA has "technical assumption" of cash rate getting to between 1.50% and 1.75% by year-end, then 2.50% by the end of 2023
The part on the RBA's "technical assumption" is interesting as he specifically highlights that term, arguing that the central bank does not "forecast" the cash rate to be at that level. It's a play on words but it basically means the same thing in my view, or at least that will be the way the market will interpret it.
He's also playing it coy be touting more flexibility on future rate moves. But at least we know that for now, 25 bps in his dictionary is "relatively small".
