The fact is the RBA has been off the pace in terms of forecasts, and strategy, and as a result they are not lifting rates into a slowing economy to try to tackle inflation which they partly created.
In addition, the latest Statement on Monetary Policy shows real wages are set to decline over the next couple of years, while overall growth will decline, despite a (artificially) low unemployment rate.
Time for a proper review of the RBA – how do we make the Governor and his team more accountable. Being embarrassed is not enough!
Go to the Walk The World Universe at https://walktheworld.com.au/
In today’s weekly review we look at the markets and muse on whether the inflation and rate adjustments driven by changes in Central Bank policy will precipitate a soft or hard landing. Some say the U.S. Federal Reserve’s effort to tame inflation with aggressive interest-rate hikes mean that a recession is inevitable, leading to a plunge in stock prices this year. Others, like Jeremy Zirin, senior portfolio manager and head of private client U.S. equities at UBS Asset Management says a soft landing is still possible. Possible yes, but is it plausible we ask?
What we do know is that the S&P 500 Index fell for a fifth consecutive week, which its longest losing streak in more than a decade, after April’s US jobs data bolstered the case for the Federal Reserve to continue to lift interest rates.
And the Dow posted its sixth-weekly loss Friday, as a better-than-expected monthly jobs report kept fears about an inflation-led slowdown in the economy front and center at a time when expectations of more aggressive Federal Reserve policy tightening continue to heat up.
Go to the Walk The World Universe at https://walktheworld.com.au/
We look at the Fed’s rate move, how the market reacted, and what it means ahead.
Overnight the The U.S. Federal Reserve delivered the biggest hike in interest rates since 2000 to a range of 0.75% to 1% from 0.25% to 0.5% previously. Ahead of the meeting, Fed Chairman Jerome Powell had hinted last month that a 50 basis points increase in the Fed funds rate was on the table. But considering the recent market falls, and the range of tightening measures already in play, the market’s expectation of a 75 basis point hike was always unlikely.
But Chair Jerome Powell did again say “Inflation is much too high and we understand the hardship it is causing and we are moving expeditiously to bring it back down,”
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Join us for a live discussion as I explore the intersection of politics and economics with Professor Steve Keen, who is running in the upcoming election as a Senate Candidate for TNL.
I caught up with Peter Marshall from comparison site Mozo.
He has been working in the Australian banking and finance industry for over 20 years and oversees Mozo’s extensive product database. He is regularly sought out for his expert commentary and analysis on banking and interest rates trends by print, radio and TV media.
Today we discuss the prospect of higher mortgage rates ahead and what people can do to prepare.
We look at how the changes in China’s economy might impact Australia.
Although Q1 GDP data was better than expected, some analysts are predicting that Q2 may be less forgiving. One clue is the rising unemployment rate in 31 major cities in China.
A key question is how much China’s government can offset decelerating growth with fiscal and monetary support? Another critical variable is whether the government continues to pursue a zero-Covid policy, which contrasts with much of the rest of the world, which is increasingly learning to live with the virus. By some accounts, the longer China tries to stave off widespread infection, the bigger the eventual blowback when the policy is abandoned, as some analysts predict.
The pandemic has to be the biggest source of risk for China’s growth this year. And this has significant consequences for Australia.
Go to the Walk The World Universe at https://walktheworld.com.au/
We look at how the changes in China’s economy might impact Australia.
Although Q1 GDP data was better than expected, some analysts are predicting that Q2 may be less forgiving. One clue is the rising unemployment rate in 31 major cities in China.
A key question is how much China’s government can offset decelerating growth with fiscal and monetary support? Another critical variable is whether the government continues to pursue a zero-Covid policy, which contrasts with much of the rest of the world, which is increasingly learning to live with the virus. By some accounts, the longer China tries to stave off widespread infection, the bigger the eventual blowback when the policy is abandoned, as some analysts predict.
The pandemic has to be the biggest source of risk for China’s growth this year. And this has significant consequences for Australia.
Go to the Walk The World Universe at https://walktheworld.com.au/
In this week’s market summary, we as usual start in the US, cover Europe and Asia and end up in Australia. This is because the US market trends drive other markets, like it or not. No market is an island – especially Australia.
Now, back in 2018, when the Fed was conducting quantitative tightening and increasing rates, US mortgage rates were around 5%, the dollar index was over 97.50, oil was trading at over $75, and the 10-year rate was around 3%. But the FED broke the markets, as the S&P 500 plunged by around 20%, and so they had to back-peddle from rate hikes. It first held them steady and then had to cut rates and restart QE by the autumn of 2019.
Just four years later, we again have mortgages rates over 5%, the dollar index is at 100, oil is trading over $100, and the 10-year rate is approaching 3%. On top of that, the Fed is now embarking on an even bigger rate hiking cycle and is very likely to conduct quantitative tightening at double the pace of the 2018 version.
CONTENTS
0:00 Start 0:15 Introduction 0:45 Fed And U Turns 3:00 Rate Rises and Policy Errors 4:40 USD 5:00 Gold 6:40 Bonds 9:15 US Economy 11:20 Reporting 12:05 US Markets 14:40 Oil 15:00 UK 15:55 Europe 17:30 Asia Inc.China 20:00 Australia 24:00 Bitcoin and Crypto 24:30 Summary and Close
Go to the Walk The World Universe at https://walktheworld.com.au/
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Caveat Emptor! Note: this is NOT financial or property advice!!
In this week’s market summary, we as usual start in the US, cover Europe and Asia and end up in Australia. This is because the US market trends drive other markets, like it or not. No market is an island – especially Australia.
Now, back in 2018, when the Fed was conducting quantitative tightening and increasing rates, US mortgage rates were around 5%, the dollar index was over 97.50, oil was trading at over $75, and the 10-year rate was around 3%. But the FED broke the markets, as the S&P 500 plunged by around 20%, and so they had to back-peddle from rate hikes. It first held them steady and then had to cut rates and restart QE by the autumn of 2019.
Just four years later, we again have mortgages rates over 5%, the dollar index is at 100, oil is trading over $100, and the 10-year rate is approaching 3%. On top of that, the Fed is now embarking on an even bigger rate hiking cycle and is very likely to conduct quantitative tightening at double the pace of the 2018 version.
CONTENTS
0:00 Start 0:15 Introduction 0:45 Fed And U Turns 3:00 Rate Rises and Policy Errors 4:40 USD 5:00 Gold 6:40 Bonds 9:15 US Economy 11:20 Reporting 12:05 US Markets 14:40 Oil 15:00 UK 15:55 Europe 17:30 Asia Inc.China 20:00 Australia 24:00 Bitcoin and Crypto 24:30 Summary and Close
Go to the Walk The World Universe at https://walktheworld.com.au/
