From James Glynn at the Wall Street Journal, just out a few minutes ago: Aussie Rates Outlook Clouded
- survey of 17 economists by The Wall Street Journal:
- showed two expect further cuts,
- seven expect no change through the year,
- and eight expect the RBA to have started raising interest rates by the end of the year.
- The opposing views would have the cash rate at either 2% or 3% by December.
- yawning divergence of views reflects widespread confusion about what is happening in the economy
- Economic growth has slowed sharply in line with a fading mining investment boom and unemployment has risen.
- Data this week showed a sharp rise in inflation which might (note, much of the inflation came from (‘government inflation’)
“National Australia Bank is in the minority expecting another rate cut this year, but we still believe that the slump in mining investment will see very weak domestic demand and rising unemployment through 2014,” said Spiros Papadopoulos, senior economist at NAB.
But those arguing for the next move in rates to be up say the ground work is in place for a recovery, adding that inflation risks in Australia will rule out a further cut.
The article is not gated if you want to read
