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, March 6, 2012

Professor Warwick McKibbin: rates may have to rise

I'm already on the record stating that the next move in rates may eventually be up, not down. The ANU's highly respected Professor Warwick McKibbin makes similar statements in the AFR today (admittedly McKibbin and I both fall into the 'super-hawk' camp), although any such move would first have to overcome the RBA's increasingly dovish board:

"Official interest rates might have to rise soon to contain wage pressures, former Reserve Bank of Australia board member Warwick McKibbin said.

While a group of economists including Professor McKibbin and another former RBA board member, Bob Gregory, think the central bank ought to leave its cash rate at 4.25 per cent today, several have said it might soon have to start tightening monetary policy.

Professor McKibbin said "the recent wage data suggests that it is likely the RBA will have to consider raising rates in the next six months,” he said.