Category Archives: Uncategorized

Fed set for -100bps — starting with -50 in July

The Fed spiked the market with dovishness this morning. Taking the market implied rate for the end-19 fed funds rate down ~18bps to ~1.6%. I think the Fed is likely to match the market: delivering a 50bps cut in July, … Continue reading

Posted in FOMC, Inflation, monetary policy, Uncategorized, USD | Leave a comment

What’s right and wrong with Terry McCrann’s Wynx article

Terry McCrann (again) spiked the markets on Wednesday with an explosive article that warned that the RBA could cut 50bps in July. Even an opposition surprising us all by behaving responsibly is now not going to stop — at the … Continue reading

Posted in AUD, monetary policy, RBA, Uncategorized | 2 Comments

Clarida: King of the Doves?

Vice Fed Chair Clarida gave a very interesting speech entitled Sustaining Maximum Employment and Price Stability on 30 May. It was interesting not only because it laid out two paths for rates cuts in 2019, but because it strongly suggests … Continue reading

Posted in FOMC, monetary policy, Uncategorized | Tagged | 1 Comment

Financial Stability and Mortgage dynamics

My argument for a May rate cut by the RBA basically boils down to the observation that inflation is very low and that there’s no financial stability reason not to cut — plus the judgement that the very low pace … Continue reading

Posted in AUD, Banks, Housing, monetary policy, RBA, Uncategorized | 6 Comments

Q1’19 CPI makes strong case for 7 May RBA cut

The slow pace of inflation in Q1 makes a very strong case for a 25 bps reduction of the RBA’s policy rate on 7 May, to 1.25%. The key trimmed mean inflation measure increased 28bps to be 1.6% higher over … Continue reading

Posted in AUD, CPI, economics, monetary policy, RBA, Uncategorized | 6 Comments

Don’t give up on a May RBA cut

The decline of the unemployment rate to 4.9% in February caused the market to substantially reduce the implied probability of a rate cut in May. This is understandable, but i think it’s wrong. What’s wrong with this is that the … Continue reading

Posted in Uncategorized | Tagged , , | 7 Comments

Another view on the credit crunch

The Sumner stuff on per-capita measures of nominal income growth made me wonder if it made more sense to think about the flow of finance in a per-capita sense. I think it does. With equivalent economic and credit conditions, you’d … Continue reading

Posted in Uncategorized | Tagged , , , | 2 Comments

Aussie GDP boom revised away

The annual revisions to GDP, and a weak 0.3%qoq in Q3 , mean that the GDP boom of H1’18 has been revised away.  The chart below shows what we thought was true (the red line) v. the new information (black … Continue reading

Posted in Uncategorized | Tagged , | 2 Comments

The problem with Aussie Housing

The RBA just released their semi-annual Financial Stability Review (FSR).  Predictability, the FSR plays down the risks from the maturity of Interest Only (IO) loans — however I think they are over-confident.  Let me explain.  In the five years prior … Continue reading

Posted in AUD, economics, Housing, RBA, Uncategorized | 4 Comments

Das Lowe-flation

RBA Gov Lowe gave the ABE Dinner speech this year — a speech entitled ‘Some Evolving Questions’.  The speech looks at the transition away from the mining investment peak , the broken link between jobs, wages and inflation, and the risks … Continue reading

Posted in AUD, RBA, Uncategorized | 8 Comments