The RBA’s decision to hold rates isn’t a calamity, but its shift in language is confounding – and worrying | Nicki Hutley

Markets had priced in a near certainty that the Reserve Bank would cut interest rates this week .

It came as a shock to many when they chose to leave the official cash rate unchanged at 3.85% .

Markets are not entirely convinced, pricing in an 85% chance of a rate cut next month .

RBA governor implied that rate cut following the August meeting was pretty well in the bag.

The RBA will need to exercise caution in its communications in the lead-up to, and following, the next monetary policy meeting if it does not want to further undermine confidence in its decision-making ability.

Confidence has given way to uncertainty and timidity, says Nicki Hutley .