Perceived Monetary Policy Rules: Evidence From Professional Forecasters in Australia

A study using Australian forecaster surveys from 2015–2025 finds perceived responsiveness of policy rates to inflation rose sharply after sustained tightening began in 2022, following modest perceived responsiveness before the pandemic. Communication on labour markets and financial stability influenced these views, but during post-COVID uncertainty beliefs about inflation’s importance adjusted only after forecasters observed policy actions. Long-run belief differences also shaped interest-rate expectations.

Analysis

The market implication is about how policy expectations are formed, not a new signal on the RBA’s next move: when uncertainty is high, realized decisions may reset rate expectations more forcefully than communication. That creates a potential gap between the impact of RBA speeches and the impact of CPI, labour-market data, and subsequent policy actions. If investors treat dovish language as durable easing guidance before the data or decisions confirm it, Australian front-end rates could be vulnerable to sharp repricing; the AUD may respond alongside rates, though global risk sentiment can dominate FX in the short run.

For the next 1–3 months, the useful test is whether market pricing changes more after policy actions than after speeches, conditional on comparable data surprises. Over 6–18 months, persistent differences in forecasters’ long-run inflation beliefs could make consensus rate expectations less informative than they appear and leave markets prone to disagreement-driven volatility. This is evidence about surveyed forecasters, not proof that markets or the RBA currently share those beliefs; it does not establish today’s mispricing or a directional rates signal.

Key Decisions for Investors

• No standalone directional trade: the study provides no current pricing, forecast, or policy signal with which to establish an attractive entry.
• Track AUD front-end OIS around RBA communication, CPI, employment releases, and policy decisions. A repeated pattern of muted speech-driven moves but larger post-action repricing would support treating realized policy as the higher-conviction catalyst.
• Conditional risk: if dovish communication pulls front-end pricing lower without confirming disinflation or a corresponding RBA action, consider a small payer position in short-dated AUD OIS, sized for event risk. Exit or invalidate if inflation and labour data soften and the RBA’s actions validate easing.
• Do not extrapolate this Australian evidence mechanically to other central banks; check whether comparable survey and market-reaction evidence supports any cross-market relative-value position.