The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Tuesday, July 20, 2010

Bizarre: RBA gets dovish subject to high CPI print and market prices in hikes

Go figure. The RBA arguably signaled a downgrade to its global growth forecasts today and the market responded by very significantly increasing the probability of rate hikes. The only rider here is the RBA's inflation target. If underlying CPI prints on the high-side at 0.9 per cent, our man Glenn will have no choice but to hike—he’s boxed himself into a corner as that would be an exact mirror of what happened in November 2007. The political fall-out associated with not hiking even with an uncertain global outlook would be massive. The European stress tests would have to be shocking. There is, of course, a decent chance of a 0.9 per cent CPI print given the average expectation of economists is around 0.8 per cent. Interesting times for our central bank.