Australia and New Zealand Economics Analyst

Latest edition · September 30, 2026

Australia and New Zealand Economics Analyst RBA Communications Signal and Noise in the New Regime

Using dictionary methods, central bank encoder models, and Claude Opus 4.7, Goldman Sachs evaluates the predictive power of RBA communications post-2023 Review. While hawkish-dovish tone has a modest correlation with subsequent policy moves, it provides no statistically robust predictive power for financial market reactions beyond the cash rate decision itself.

In response to the 2023 RBA Review, the Reserve Bank of Australia expanded post-meeting press conferences, unscripted remarks, and statement detail. Analyzing these communications using three NLP approaches (dictionary-based, RoBERTa CB-LM, and Claude Opus 4.7), Goldman Sachs finds that although tone indices correlate positively with cash rate decisions, their marginal predictive power beyond standard Taylor-rule fundamentals is weak, and they fail to explain decision-window OIS moves. Furthermore, hedging and uncertainty language has structurally increased post-2023 beyond levels justified by inflation or geopolitical risk, reflecting an explicit pivot from forward guidance to data dependency that has increased decision-day market surprises.

Key takeaways from the latest edition

• 1.NLP-derived hawkish-dovish tone indices are statistically significant in predicting RBA policy direction, but their explanatory power is weak in practice and they do not reliably predict decision-day financial market moves.
• 2.A structural break post-2023 shows a sharp increase in hedging and uncertain language in RBA communications, exceeding what can be explained by domestic inflation deviations or global geopolitical risk.
• 3.The RBA's communication overhaul has coincided with larger decision-day market surprises, persistent university-level readability complexity, and an impending shift toward a more decentralized, multi-vocal Monetary Policy Board communication model.

What this series covers

• Finding signal in changing RBA communications
• Increasingly uncertain communication
• A work in progress
• Natural language processing methods used to analyse RBA communications
• Measuring the predictive content of RBA communications for subsequent policy rate moves
• Measuring the predictive content of RBA communications for post-decision OIS moves
• Assessing drivers of RBA uncertainty language

Edition archive

• Australia and New Zealand Economics Analyst RBA Communications Signal and Noise in the New Regime

  September 30, 2026

• Australia and New Zealand Economics Analyst Australia’s Data Centre Growth Boost a Fraction of the Mining Boom

  August 28, 2026

• Australia and New Zealand Economics Analyst House Prices to Fall, Incomes to Stall, Spending to Slow

  July 12, 2026