RBA interest rate futures dove-up

David Llewellyn-Smith

Friday, 8 March 2024

But nowhere enough yet. They are now pricing a measly three cuts in 18 months:

My view is it will be double that, at least.

I have no idea why the market is still so hawkish. Inflation is falling well ahead of the RBA outlook:

The economy is in a stall:

And dead ahead is an unemployment shock that the RBA does not have in its outlook:

The longer the RBA waits for lagging data confirmation, the harder and deeper will be its dovish pivot.

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.