RBA to slash interest rates faster and harder than Fed

Friday, 16 February 2024

I’m not sure what is wrong with local economists, but the consensus notion that the RBA will cut the cash rate later and more slowly than the US Fed is laughably wrong.

Rather than blather about it again, here are some charts from Gareth Aird’s excellent team at CBA (now the pre-eminent economic forecasting shop in Australia after Luci Ellis replaced Bill Evans and ruined Westpac).

The RBA will be forced to pivot hard, slash and burn while the Fed can take its good time.

The local bond market is cheap, cheap.

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.