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, April 11, 2012

Koukoulas: Will RBA cut by 50 or more in May?

Fascinating sequence of Tweets today from ALP-aligned economist, Stephen Koukoulas. A 50 basis point cut in May would certainly give a huge boost to the housing market. Although one does ponder on the pickle the RBA will be in if the six month moving-average for inflation prints at above 2.5% when the CPI is released (especially accounting for the two rate cuts we have already had, which have yet to have their full effect on the real economy--and won't for another year or so--combined with the reversal of the high exchange rate that so many claimed was depressing activity in trade-exposed sectors). Unemployment tomorrow will offer important additional colour; the market is looking for the UE rate to increase. Any stability or a decline would be a surprise. And here is "Koukie":

"[W]e should be careful not to blame govt for RBA error. Govt surplus plans have been given for 2 yeears [sic]...Will RBA cut by 50 or more in May? Needs to make up for earlier inaction, plus add some insurance for current anf [sic] future negative risks"