Interest rates to skyrocket then crash

Tuesday, 27 September 2022

Bond opportunity anyone? This analysis nicely illustrates what a moveable feast is the notion of a neutral rate of interest. Moreover, in the US it may be that there are long lags in monetary policy effects but not in Australia where household debt dependency and floating rate mortgages transmit tightening faster. Nomura has the outlook.

Higher Neutral Rate, Higher Terminal Rate

We revise up our terminal rate forecast to 5.25-5.50% and a faster pace of cuts in 2024

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

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.