The great wind vane swings with a screech via Fairfax:
Stephen Koukoulas, the outspoken economist and former advisor to Julia Gillard, is forecasting the next move in the RBA cash rate to be higher.
“Growth is probably going to be closer to 3 per cent next year and I think the next interest-rate move will be up,” said Koukoulas, who is now managing director of Canberra-based Market Economics. He is calling for a 25 basis point hike in the third quarter of 2015.
In the latest survey by Bloomberg, taken before the roaring jobs report, BT Financial and Societe Generale are the only other two institutions – apart from Market Economics – predicting rates will start going up in the third quarter of next year.
Most other economists had them heading down next year, but there are likely to be some revisions after the jobs surprise.
Koukoulas’ rates prediction follows his correct call that the jobs data would surprise on the upside – his prediction that the unemployment would drop to 6 per cent was closest to the 5.9 per cent reported.
“The rash of firing in the bureaucracy seems to have come to an end and labour-intensive industries like retail and housing construction are doing OK.”
But it must be said its not the first time he’s stuck his neck out. In late 2013 he said the RBA would need to hike by 100 basis points in 2014.
To be fair, Koukoulas revised that call midway through the year and became one of the first local economists to predict the RBA would have to cut again.
Yep, that’s the Kouk for ya. He’s got Buckley’s but at least we know he’ll be the first to swing when the cuts loom!
