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Short-end Aussie yields are on a tear as the one-year prices in another one-and-a-half rate hikes.
It is notable that we are now at interest rate levels that were sufficient to plunge the entire east coast into a deep recession in 2010. This was to “make room” for the greatest-ever Australian mining investment boom in WA and QLD:
Rates back at 2010 levels without triggering a recession in the eastern economy is a measure of how extreme was the COVID stimulus, as well as how deep the economic downside may become as the rate hikes flow through to mortgages.
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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.
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