Nine News reported a dire prediction from ANZ bank that most mortgagees really won’t want to hear. I think they’ll be proved wrong but let’s see what this economics team is saying and compare it to the view of 32 of the country’s top economists.

It's always surprises me how the media never reminds big call merchants, who so often get it so wrong, just how wrong they’ve been. As someone who’s expected to make calls on the economy and markets, I know how hard getting it right can be. But I so believe if we praise those who get it right, we should also point out when some big calls were unnecessarily negative or positive.

This is what Nine News reported and what Ben Fordham on 2GB asked me to comment on this morning: “Interest rates could rise another four times before Christmas, according to one of Australia's big four banks, painting a bleak picture for homeowners as cost of living pressures already squeeze the family budget.

“ANZ on Tuesday predicted interest rates could rise by 50 basis points in August, September, October and November, which would leave the cash rate at 3.35 per cent. That means the average Sydney mortgage holder could pay another $1,300 per month.”

That adds $15,600 a year to repayments, and if the RBA does that by year’s end, Dr Phil Lowe, boss of the RBA, would go close to creating a recession in 2023.

When the RBA meets on August 2, I expect another 0.5% rate rise for the cash rate of interest, and probably another in September. But then I’m guessing Dr Phil will hold fire to see what his rate rises do to inflation, the economy and the jobless rate. He’ll also look at consumer and business confidence as well as the inflation expectations of consumers, which on last reading were heading down here and in the US.

As a reminder, the current cash rate is 1.35%, and if you add in four 0.5% rises, that takes it to 3.35%.

That’s my best guess. But what are 32 of our top economists (surveyed by the AFR a couple of weeks ago) saying about the cash rate by December 2023?

Let’s see what these economists predicted:

1. Not one economist agrees with this call.

2. Three economists saw the cash rate at 3.1%.

3. The median call was 2.35%, which is a lot less than 3.35%

4. Three economists had the cash rate under 2%.

5. 16 economists were perched between 2.1% and 2.35%.

The team at ANZ may have been influenced by the latest unemployment number, which saw the jobless rate fall from 3.9% to 3.5%. This fall could easily have made them push up their inflation forecast, which then became a higher cash rate than they were expecting by Christmas. But I think they’ve gone too far.

If the average mortgage holder is set to lose an extra $15,500 to the banks each year to cover their loan, this will really hurt retail and services businesses.

It would also escalate the chances of 32 out of 32 economists being wrong on their ‘no recession’ call over 2022 and 2023.

I’m expecting 2023 to be an economic rebound year, hopefully sparked by the end of the Ukraine war and substantially lower oil prices, which will help lower our petrol and power bills. I also expect China will be out of lockdown and US President Biden will be trying to win back friends and influence voters following his collapse in the popularity polls since inflation climbed to 9.1%!

History shows the US stock market does best in years three and four of a US presidency and stock prices need a good economy to feed into profits. So I expect the White House will be in an economy-friendly mood.

I also like this chart below. It shows that after we beat lockdowns and other economic and business-hurting events (like real wars and trade wars), economies rebound. Watch the Economic Activity Tracker blue line. See how it fell with lockdowns in March 2020 and July to September 2021 but how it rebounded once the lockdown and bad news ended.

I expect a 2023 rebound is a very good chance, but too many interest rate rises from the RBA could spoil all that.