Australian manufacturing
Deputy Reserve Bank governor Guy Debelle. (Image: AAP/David Kapernick)

A few more quarters will give us a better perspective, but this week may prove to be a key inflection point for the economy and monetary policy.

In a speech to the Australian Business Economists group last night, Reserve Bank deputy governor Guy Debelle made it clear that while the central bank still saw the next move in interest rates as up, a cut was also being considered. “The Reserve Bank has repeatedly said that our expectation is that the next move in monetary policy is more likely up than down, though it is some way off. But should that turn out not to be the case, there is still scope for further reductions in the policy rate. It is the level of interest rates that matters and they can still move lower."