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."
Thursday, February 16, 2012
Market and economists start shifting their views on rates
"We are not surprised by the market’s lower pricing for the cash rate this year following this release (year-ended rate is now 3.74% from 3.21% at the start of February) and acknowledge some risk to our central view of one further rate cut by mid year without more bank pass through of higher funding costs or additional European woes."
"This evidence along with the official data does not indicate that we should revise our key forecast for a rise in the unemployment rate. However, with the Reserve Bank Governor indicating that demand conditions would have to "weaken materially" today's employment report makes our current call for a rate cut in March inappropriate. We still expect that the easing cycle which began in November has not run its course with the 100 bp's we assessed back in July last year still being required. With 50 bp's having already been delivered we still expect a further 50 bp's in 2 tranches over coming months. Our best estimate is that the next move, given the clear resolve of the Reserve bank at this stage, is for the next cut to be in May with a follow up move in June/July."
"We now believe the next window for the RBA to cut official interest rates has been pushed out to May."
"[A]fter this report we acknowledge the risk that the first 25 bp rate cut occurs as soon as March is more problematic."