“Mad” Adam: Interest rates at bottom

From Adam Carr at Dad’s Army:

Basically, I think that whatever the cash rate is by June, it’ll be the trough, which means that he window for the next 50bp is quite narrow. There are two reasons for this: firstly, and taken at face value, the Federal Reserve is preparing the world for a tightening cycle sometime later this year.

…As simple as it sounds, that one small decision from the Fed will have a profound impact around the globe: it’ll effectively put an end to the global currency wars, or at least establish some form of hiatus.

…This brings me to the second reason: all in all, most of the domestic economic data out over the last few months has been strong, or at the very least shown an upswing, including in retail spending, building approvals, new home loans, credit, jobs growth, and of course non-mining investment.

For interest rate doves and dollar shorts this is like shooting fish in barrel.

Comments

  1. You have to wonder whether he actually believes what he writes or whether he’s just deliberately filling a market niche.

  2. He doesn’t give a firm call either way (so think the title of this post is misleading). If we see the 50pt drop by mid year then it would only be 25pts from what you’ve suggested recently will be the bottom anyway…

  3. Double pronged attack by the Dad’s army brigade on the Victorian Labor Govt not upholding the East West Link contracts. Alleged “sovereign risk” etc and invoking the ghost of Jack Lang.

    If a new govt cannot legitimately terminate errant policy of the former govt, for which it was appropriately thrown out, what in God’s are they able to do.

    Next they will be suggesting the Qld Labor should honor the Newman Govt’s contracts for the sale of assets and the Adani train line!!!!!

    Really shows where the true sense of entitlement lies in this fair country, and what needs to be changed for the good of the whole of the populace.

    • Rupert is not happy. His propaganda arm aimed at the working classes “The Herald Sun” is running a campaign against Daniel Andrews and the Labour Decision not to proceed. What ever audience there is out there Rupert and his minions are aiming for them.

      Also i am not sure about the Fed raising rates. Lots of huff & puff I reckon until I see the deed done. I would love to see them go for 1/2 or 3/4 of a percent if things are really going that well over there

  4. He’s just filling a market niche. He is the anti Gerard Minack. If you take the same side of the cycle 100% of the time, you are going to be right 50% of the time, which is good enough.

    Whereas if you try to call the ups and the downs, then you might be right 100% of the time, but you might be right 0% of the time. It’s a much riskier space to play in.

  5. WRONG

    The Strayan economy has structured itself over the past 20+ years as a housing as the security/credit growth higher thn wages growth ATM.

    Rates to ZIRP in an attept to pre-empt mono asset class systemic economic default…i.e. Land bubble collapse