Sorry to break it to you, but this isn’t the day we stop feeling so sorry for ourselves

And though the RBA raised interest rates by 4.25 percentage points over the 18 months to November 2023, I don’t expect it to cut rates by more than about 1 percentage point, leaving the official interest rate at about 3.35 per cent.

Why? Because its 4.25-point increase brought the rate up from its crisis level of almost zero during the pandemic and its lockdowns. Now the RBA will be getting the rate back to normal, not crisis territory.

And while we’re all feeling so sorry for ourselves, don’t forget this. Normally, by the time the RBA starts cutting interest rates the economy is in recession and unemployment is way up.

Our economy is becalmed, but in nothing like a recession. Right now, we have a higher proportion of the working-age population in jobs than ever before. At 4 per cent, our rate of unemployment is lower than it’s been in most of the past 50 years. Sound terrible to you?

Indeed, it’s the remarkable strength of our jobs market that’s the main reason the RBA has been so reluctant to cut interest rates until now, and remains “cautious” about cutting them further.

Ross Gittins unpacks the economy in an exclusive subscriber-only newsletter. Sign up to receive it every Tuesday evening.