The relentless rise in Australian yields, to levels far beyond anything that the economy will be able to take, is now posing an interesting question. Futures are now pricing a terminal interest rate of 3.7% next year. This would obviously destroy Australian house prices and the economy both:
Sovereign yields are quickly playing catch-up in the single-sharpest and largest repricing in modern history:
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We must ask, then, has Australia in fact lost control of its own interest rates. To put it bluntly, has RBA bumbling triggered an Australian sovereign debt crisis? To wit:
