Why the market doesn’t believe the RBA on rates

The bond market is sticking with its prediction of at least one interest rate cut by the Reserve Bank this year, defying governor Michele Bullock’s “unequivocal” message of no rate relief for at least the next six months.

The central bank on Tuesday left the cash rate at a 12-year high of 4.35 per cent saying inflation remained “too high”. Ms Bullock followed up at the press conference by not only ruling out a rate cut for at least 2024 but also revealing that the board had even discussed a rate increase.