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."

Wednesday, October 26, 2011

Stephen Koukoulas's day of reckoning (Part 1)

My good buddy Stephen Koukoulas, who has advised the prime minister, has been one of the most dovish forecasting economists in Australia. He recently predicted a rate cut in October, and, if that did not come, two rate cuts in November. He is also forecasting a super low CPI of 0.3% today. I am crossing my fingers in hope he is right: there would be nothing better for all Australians to have no inflation worries. Oh, and finally, Steve thinks we will have a 3.5% RBA cash rate by June next year (that's 5x RBA rate cuts). I have told him that I think two rate cuts in November and a 3.5% cash rate by June 2012 are very unlikely. I will make my mind up on what I think the RBA is likely to do following today's inflation data. The same is true about the RBA itself--it has no idea what it will do in November until we get the crucial inflation print.