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Are you saying they look at what has happened & is currently happening, and decide to adjust rates based on that ? :confused: Or are they a bit smarter & think a little way ahead, since they know that a rate rises takes 3-6 months to filter though to the economy. Inflation was high in 07 &...

The RBA is forward looking, not backward looking. The GDP numbers are what has happened, and are therefore not relevant to the cash rate in the future. Current conditions and past conditions have a lower weighing than expected conditions. The future is likely to be better than the past...