“The RBA appears to have no intention of reducing the cash rate any further,” said Matt Robinson, an economist with Moody’s Economy.com. 
“I think a housing market bubble is starting to form, and given the sentiment that governor Stevens expressed in his speech to the Australian Business Economists, that is something that the RBA is watching and that would be a reason for them to maybe hike interest rates earlier.”
There were doubts about whether the RBA would be deterred from raising rates if unemployment continued to rise.
The RBA has kept the cash rate at 3 per cent for three consecutive months.
Michael Turner, an economist with financial markets research group 4Cast, said the prospect of rising unemployment would mean the cental bank could keep rates steady until well into 2010.
“We’re still of the opinion the worse is yet to come and things look better now than they did a couple of months ago, which is why we’re now calling it on hold (in August) rather than going lower,” he said.
“But we still think there’s enough of a story in the lack of utilisation in the economy at the moment that price pressure might be moderate enough at 3 per cent.
“We’re currently chewing on a rate rise in 2010 at the moment. It’s possible, but not until late 2010.”
If you look at the split in the market or the way the debate was being conducted it was very much the idea that the RBA isn’t going to hike because they never have while the jobless rate has been rising.
All the latest NEWS from Perth 