Well done to the RBA. Having promised rock bottom rates to 2024, it has now unleashed the greatest single greatest interest rate shock in modern history:
There is nothing in the Australian economic outlook to support these rates. It is some combination of failed RBA credibility, Wall Street commodities narrative, and temporary post-COVID bounce.
There are 820 words left in this subscriber-only article.
Get your first month for $1
The Australian curve has started to flatten but remains far too steep:
Spreads to the US are now positive across the curve:
In my view, this rate spike is in the process of shocking the Aussie economy to a standstill just as we head into a global bust.