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, April 24, 2012

What were economists forecasting *before* today's inflation data?

It is interesting to see the rate forecasts well before today's not-entirely-unexpected downside surprise to inflation (a risk flagged by many analysts following the weak NZ CPI, weak import prices, and weak producer prices). Consensus was for a 25bps RBA cut in May (red line) with only one projection of 50bps. Consensus is almost certainly still 25, although there will be a few more folks in the 50 camp. The average forecast was putting weight on the possibility of two cuts before year-end, but was not completely there. You can see my "cheat sheet" of what to expect from the RBA based on different core CPI outcomes below this chart too. The top two rows are the ones to focus on...