Bom, bom, bom, bom, bom, bom, bom, BOM, BOM, bom, bom, bom, bom, bom, bom, bom, BOM, BOM. That's Ross starting to pound the rates drums... He also has another crack at convincing consumers that they are benefiting from deflation. Anyhow, it does not get much more explicit than this:
"Little wonder the financial markets aren't expecting any further increases in the official interest rate until quite late this year, and the governor of the Reserve Bank, Glenn Stevens, thinks rates are ''about right for the medium-term outlook''. But I think there's a lot more strength behind the economy than all the surface noise would suggest. If I'm right, the rate rises will resume earlier than the markets presently expect...
The economy's potential rate of economic growth is only about 3.25 per cent a year and, with unemployment already down to 5 per cent, we have little spare production capacity. Even so, the Reserve is forecasting growth of about 4.25 per cent over this year, with growth of 3.75 to 4 per cent in the following years. Sounds like a recipe for higher interest rates to me."
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