 standing by outside the RBA headquarters with Mark Bailey of FIG Securities. Of course, as he always is on RBA Day, Carson. To be here, we are on the ropes almost literally. We're kind of pinned in. There's a lot of activity. Mark Bailey from FIG, we got construction going on right opposite the reserve bag. Is that a metaphor for the animal spirits having been unleashed and actually them not needing to cut today? What's your view there? I don't think so. And I think if you're actually reading the figures behind the anecdotal evidence that you do see across the road, that sector is slowing down a bit. And the RBA has also highlighted the fact in terms of house prices and the kind of look coming on the market to be kind of wary on that in terms of investors. If you're looking more broadly in terms of some of the CPI figures that came out, we're obviously debating beforehand. I actually thought they were actually slightly stronger than expected, 0.5 versus 0.4. I do take on board in terms of your year on year figures which are well below the two to 3% band. But again, that two to 3% band was set a long time ago for a different global economy. So my view is I think they'll probably hold today. It's gonna be a line ball call. Mark, it's a pricing in 2.3% chance and around about 75% of economists are expecting a cut. So kind of against the consensus there. The Australian dollar, I mean, they don't mention it. No central bank will admit to currency war. I mean, because frankly speaking, you can't buy the fed, we know that. But once you start it, all bets would be off. It would be that race unbridled to zero. What of the push back to 80 cents, a live reality? If they don't cut today, that would be higher than when they did cut in May at 77. Yeah, I agree and, you know, but a lot of what is driving that Aussie dollar is the Fed and the fact that they are pushing out their interest rates hike further down the chutes, so to speak. And in terms of the Aussie dollar and what we're seeing there, I think, you know, in terms of- So why fight the Fed, incidentally? Why fight them? I mean, if they are pushing it out even to next year, HSBC says middle 2017 is when we get the next rate hike by the Fed. If that's the case, why would you wait and do nothing and allow further deflationary pressures into the economy? Look, I don't think that any central bank these days, given what happened to the Bank of England, you know, back in the early 90s, would actually look to take on the currency market and speculate is that I think it's a fool's game. You know, the currency will eventually go down to fundamentals and that in terms of GDP growth at around about 2.5, 2.3% is not bad considering what it is elsewhere. And, you know, the interest rate differential between the two countries is also helping to drive the Aussie dollar. Back to your last point, though, which was the concession on year on year, 1% inflation, they can pass a quarter off as being a blip in the system, as being factors beyond their control. But annualized, it's a lot smoother. It's a lot more projecting what has happened and what will likely then continue as the trend. They need to act, I put to you. It is, but again, if you look at the dual mandate of employment, the employment figures were pretty strong outside the headline figure. You know, part-time. Only keeping pace with immigration, as you know, the number of jobs out there in the real economy is barely meeting the demand that's there. So, we're basically not going back to 5%, which is university regard as full employment for Australia. We're above that level. That means there's more accommodation able to be used. That is true, but in terms of going back to the jobs figures and the data that we've been provided, the full-time job count was plus 38,000. Part-time was down 30,000. That was only one month, though. That was one month. Not a trend. It's not a trend. But again, you know, but if you look at over that longer period of time, it has actually been quite strong on the employment side. So, again, I think the RBA has got room to consider its position. Ours worked to falling. That is not good. That shows that there is still spare capacity in the economy. And that in order to tap that, you need to create conditions for businesses that basically free them up to do just that. Their real prices are going up, Mark, as those rates stay steady, but their costs stay fixed, which are their overheads, their rents, they're not falling. No, but equally, again, what has changed over the last month? Maybe the CPI, and as we go back to, we're debating whether it was a weaker than expected figure or a stronger than expected figure, but was it so far out of the RBA's consensus and their expectations that it does force them to cut? And I also wonder as well whether Phillip Lowe, coming in mid-September, kind of throws a bit of an internal spunner in the works in terms of what their position to do in terms of whether they want to leave some more ammunition in the kitty for the new governor. Or would you not argue, as poor Box Information's VC does, that it would be far better for the work to be done for Phillip Lowe, rather than creating a pressure on him in his first outing to do something that arguably could be done sooner rather than left to later? Yeah, I mean, I guess you can call both sides of the argument there, but it's just gonna be interesting in terms of whether that does come internally, and obviously you're not gonna see that in terms of the papers, but I think in terms of the Brexit situation as well, that's considerably better than it was last month. China. China. Looking relatively, in terms of its demand for our products, look at the iron ore price, for instance. I mean, it's defying all the naysayers and continuing to hold at elevated levels that many are expecting to unwind, but they haven't. Yeah, I mean, China's probably been mixed. You know, and it continues to plot along. You know, it just has some pretty good PMI data. And the real metric sort of recognition of that, coming from BHP and its production numbers, we'll get Rio's ones tomorrow. When you look at what they see as the real demand for what they ship, versus the kind of flimflab numbers China itself puts out miraculously on projection, even though most economists are now not covering those numbers. If you notice, the Bloomberg surveys have been winnowed down and winnowed down because fewer investment banks are prepared to actually narrow their colors to the mass. They don't see those numbers as robust, do they? No, I mean, I guess, you know, we've had our own question marks about our employment data as well through the ABS as well. I mean, obviously not to the same extent, but yeah, in terms of the real figures, BHP and Rio, you get a better read, probably in terms of the internal work into the Chinese economy there. And they're expected to be pretty robust as well. So again, you know, does that point to an RBA that needs to cut, it's gonna be forced to cut? I'm not sure. I mean, I think the market pricing at around about two 30% chances is probably about fair. The idea as well of that type of thing that we began this discussion with, whether they're even converting those to flats is gonna be interesting. There used to be a Westpac bank right opposite us. The idea though that we may have seen the peak and arguably need to see the peak in construction to now match some kind of an equilibrium on price because like a lot of things like that, that demand supply on iron ore and energy and oil, even with building, if you get that runaway, unbridled building story, it could be an overheated market, yet again that we worry about. Do you get a sense that that is another consideration or the lending figures that we saw out in June from the reserve bank suggests any moderation care of APRA is doing that work anyway? Yeah, I mean, I don't think that's the RBA's view as well that the legislation that's coming and the restrictions on lending have calmed the market down. But again, they were pretty explicit in terms of the minutes of the last meeting that there's excess supply coming on the eastern seaboard capitals of Sydney, Brisbane and Melbourne. And that's especially on the apartment side and that could potentially cause a fairly severe pullback in terms of prices. So they're already flagging that as a risk. And I guess if they're really worried about that, then potentially just point to another cut. Really final thought because we got a wrap. The idea now that in this investment environment, you've got certain houses buying JGBs for capital gains. Did that ever occur to you would be possible that would be an investment thesis that in this case QIC adopts? Yeah, the greater full theory. No, 10 years ago, nobody would have thought negative yields. The Swiss curve all the way out to 50 years, negative yields. I mean, it's a crazy unprecedented time that we live in. And the central banks have to adopt to that. And in terms of their inflation targeting of 2% to 3%, maybe that should be one to two and maybe that should be acknowledged more explicitly. Well, the governor saying he's not wanting to move on that targeting. He sees that it's worked and it was a New Zealand's concept of course and construct many years ago. Doesn't want to unsettle the horses with the change there. But Mark, thank you so much. And according to Mark Bailey, we'll be put out of our misery in how many minutes Mark, my watch has stopped. About 25. Okay, I think it's more like 20 now. We've added on a little bit. But thank you so much. And we'll talk to you soon. We'll be back live with Warren Hogan, the Economist par excellence in grid. And there's a cast full of characters in your studio all locked and ready to roll as well. There is and there's exactly 20 minutes, Carson.