I think we need to calm the farm a bit over the Reserve Bank cutting the Official Cash Rate. 

Sure, it’s going to mean a slight reduction in how much interest we pay for our mortgages and business loans - and there’s talk of more reductions to come.  

Which is all good news. But are we really out of the woods yet? I don’t think we are. 

But if you listened or saw some of the reports yesterday and last night and this morning, there was ridiculous talk about the nation collectively heaving a sigh of relief. Which is nonsense. 

One report I heard was a bit more accurate, when it said the cash rate has become something of a national obsession. 

I saw a guy on TV last night - he was a first home-buyer - and he was saying how great the OCR cut was because it meant he’d be able to pay his mortgage off years earlier. Which just didn't make sense at all. Because, when he gets his mortgage, he’ll know how much things change over 25, 30 years.   

The point I’m making, is that the Official Cash Rate - when it comes down to it - is just one factor when we’re talking about something like the cost of living.  

Which is why I think we need to calm the farm. Because it isn’t necessarily the light at the end of the tunnel that people are banging on about, because there are so many other factors that determine whether you and I feel as if we have a bit more money in our pockets. 

I was talking to someone about this earlier and they said ‘oh hold on a minute….it wasn’t that long ago that you were saying that as soon as the cash rate starts coming down, you’ll see that as a sign that things are on the improve and you’ll feel more positive about things.’ 

Now, first of all, I couldn’t actually remember saying that. But let’s assume I did - because I don’t have the greatest memory. 

So let’s say that that was my view of the world a month or two ago, it isn’t now. Because so much has changed. 

Just like the Reserve Bank Governor himself is saying to the people criticising him for saying there’d be no cuts to the cash rate until the second half of next year, and then going and announcing a cut yesterday. 

Things change. And if it was my view a few months back - as someone reminded me earlier this morning - that an interest rate cut would be the light at the end of the tunnel; well, that was then and this is now. 

A few months ago, we didn’t have manufacturing plants closing down because they couldn’t afford the power; we didn’t have the country being so short of power that the Government was talking about importing gas; and we still have business owners saying they’re hanging on just to “survive ‘til 2025”. 

Businesses are going under at a faster rate than they have in years and $400 power bills aren’t uncommon for your average home.   

I’m not wanting to be the prophet of doom or anything. I’m just pointing out a few of the things that aren’t just going to disappear because the Official Cash Rate is lower than what it was this time yesterday. 

Then there’s all the stuff happening around the world. Which we have no influence over. The positive side is that inflation caused by the prices we pay for stuff we bring into the country is down.  

But if you can predict where that might go by the end of this year, then you know more than I do. The US economy is slowing down. But there’s also China and the Middle East to be weary of. 

Which is why - when I think about all that stuff - I say that let’s just pause, take a breath, and see the cut in the Official Cash rate for what it is. A piece in the puzzle. And that’s all. 

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