Bloxham elects the death of a thousand cuts

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Paul Boxham is out with a note this morning changing his hawkish rate call by pushing out his fist hike by one quarter:

Inflation is low enough for the RBA to consider a rate cut: but demand is lifting, albeit modestly, so we expect them to hold

  • Low rates are already gaining traction, supporting a rise in retail sales and housing prices, although building approvals and consumer sentiment have eased back a bit
  • We have changed our medium-term view: given lower Chinese growth, continued AUD strength and low local inflation, we now don’t expect a rate rise until early 2014

A word of advice. When you’re wrong, it’s much better to say so, take the pain, and move on. Death by a thousand cuts only prolongs the damage. Bloxo’s new forecasts are:

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130503 the RBA Observer – A Close Call, But We Still Expect Them to Hold

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.