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, April 23, 2012

How one of world's biggest banks took PM Gillard's comments on RBA

While one rabid ALP economist tries to argue that when the PM publicly seeks easier monetary policy she is not looking for lower interest rates, and conveniently ignores the fact that this was precisely the briefing given by the PM's office to none other than the AFR's Laura Tingle, here is the objective assessment of one of the world's biggest banks in a note to clients:

"Meanwhile, in Australia, some attention has been directed to a speech by PM Gillard in Perth. Initial briefing before the speech suggested a surplus by 2012/13 would give the RBA more room to cut rates. That line seemed to be politically motivated, since there is absolutely nothing about the current setting of fiscal policy that is preventing the RBA from cutting rates. A particularly harsh contraction in fiscal policy might convince the RBA to cut rates in an effort to balance the impact of monetary and fiscal policy. But that’s not the same thing as giving the RBA room to cut rates. The PM has since retreated a little, softened her language and reiterated the RBA’s independence."

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