From Mr Joye at the AFR:
…One of Australia’s sharpest bond traders [says] that the RBA will cut again and that 10-year rates in the United States, which are the benchmark for the long-term price of money in many countries like ours, will not lift far given hefty government debt levels. The idea is that modern economies are much more sensitive to interest rate changes than they were previously, and that elevated public debt burdens will be hard to sustain if the cost of that capital increases too much.
“The economy will self-correct and inflation will likely remain contained,” the barrel-chested bond bandit claims. A senior rates trader at a leading investment bank, who won a university medal in economics, likewise opines that “the RBA won’t hike rates during my lifetime.”
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