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."

Monday, June 20, 2011

Market currently pricing in interest rate *cuts* until Feb 2012

Here are the latest interest rate expectations (red line) according to financial markets (not economists). Small chance of a cut priced through to Feb next year, with no hikes priced at all. Aussie interest rate markets have priced cuts in before, during the Japanese crisis earlier in the year (wrong), and during the first round of the European sovereign debt crisis last year (wrong again--in fact, we got the equivalent of nearly two hikes in November). The other lines show financial market pricing on the dates the RBA released its Statements on Monetary Policy, which are intended to provide guidance to market expectations.

at 11:48 AM