The RBA’s board is due to hold its monthly monetary policy meeting next week and the outlook for interest rates is as clear as mud.
That doesn’t apply to the outcome of the meeting on Tuesday.
The overwhelming consensus among economists and money market traders is that the cash rate will be kept at 2.5 per cent on Tuesday.
That would mean the beginning of a second year at a record low, after the cut from 2.75 per cent in August last year.
And the futures market says the cash rate will make it all the way through that second year without budging.
That would make it the longest interval without a change in the cash rate since the RBA began announcing its moves in January 1990.
And it could turn out that way.
The market appears to give a little more risk on the downside than on the upside for the RBA’s cash rate in the meantime, putting it at closer to 2.4 per cent late this year and early in 2015.
Last week, RBA governor Glenn Stevens acknowledged the possibility of a further cut, if needed, in answer to a question following a speech in Sydney, although he quite obviously sees it as a remote chance.
But market pricing doesn’t really tell us everything – it’s not so much a forecast by the market as the average of a wide range of forecasts by a large number of market players.
The thinking of economists reflects that divergence.
Some think another rate cut is a distinct possibility while others confidently expect the next move to be up.
One thing they tend to agree on is a “period of stability”, as the RBA insists on calling it, for a least a few months.
And most think the next move is going to upward.
But that majority view is not matched by a consensus about when the so-called normalisation of interest rates will start, anything from later this year to the second half of next year.
Maybe the answers will be a little less elusive when the RBA issues its usual terse announcement after the meeting on Tuesday, or in its quarterly monetary policy statement the following Friday.
But it would be unwise for anyone to get their hopes up.
The chances are that the monthly policy announcement and the quarterly statement will look very much like their predecessors.
The fact is that the questions clouding the outlook will be with us for a while.
The economy’s transition away from dependence on the mining investment boom might result in strong growth and high inflation and lead to an early rate rise.
It could lead to slow growth and low inflation, with another rate cut.
Or it could keep the economy in the Goldilocks zone in between, leaving the RBA with the option, but not the immediate need, to nudge rates higher at its leisure.
That will be determined by a host of factors as diverse as the path of the Australian dollar, consumer and business confidence, and the decisions made in other countries about interest rates.
And it won’t be determined next week.