19 April 2021
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Christopher Joye

17 August 2012
More on parsing the Australian equity risk premium

As I mentioned this week's AFR column, Professor Richard Heaney and Stephen Kidd are in the process of publishing a detailed academic study on the measurement of the 'equity risk premium puzzle' that arrives at broadly similar conclusions to those that I discussed. In a conversation with one of the authors yesterday he proposed this […]

20 June 2012
RBA never considered cutting 50

Analysis of the RBA's June board minutes suggests that the central bank never considered another "super-sized" 50 basis point cut in June (as forecast by several folks and seriously countenanced by financial markets). The choice was a "finely balanced" one between no move at all and a 25 basis point cut for insurance purposes. Even […]

27 April 2012
Australia has a (domestic) inflation problem

  It is good to see all the smart commentators pointing out this issue (eg, Stutchbury, Mitchell, Verrender, etc). Australia's purportedly "low" core inflation rate, which at 2.2 per cent is actually still inside the RBA's target band (and above the target of most other central banks), has been primarily driven by the appreciation of the […]

24 April 2012
Koukie forecasts 50bp or possibly 75p cut in May

The ALP economist and former contributor to this blog, Stephen Koukoulas, reckons given the spectre of deflation we will get a 50 basis point cut in May, and possibly 75. On Twitter, he responded to the CPI data commenting, "here comes 50 or even 75", and then, "RBA must cut 50". I guess anything is […]

24 April 2012
Credit where it is due...

While a lot of analysts got February, March and April wrong, and a low core CPI print this quarter was widely anticipated (including the downside surprise), some have been much closer to the mark about the ultimate direction of rates since around the second half of last year. These include Bill Evans at Westpac, Tim Toohey […]

24 April 2012
Economists gear up for downside surprise to Aussie inflation data

With the combination of very weak import and producer prices, most economists are now flagging the risk of a significant downside surprise to the already low consensus forecast of about 0.5 per cent to 0.6 per cent in Q1 (and hence a cut in May and possibly June). In fact, I have not seen anybody […]

23 April 2012
Inflation cheat sheet: what it means for rates in May

With so much talk about tomorrow's ABS inflation data, and the potential ramifications this will have for the RBA's rates decision at its May Board meeting, I thought I would pull together my own "cheat sheet". In brief, this guide combines the March quarter "core" inflation numbers with the inflation measured over the preceding three […]

23 April 2012
In 2009 Swan said it was "absurd and wrong" to link fiscal policy to RBA's cash rate

The Australian has been (justifiably) on the warpath highlighting the inconsistencies in the Gillard Government's attempts to jawbone the RBA into lower rates on the back of promises of tighter fiscal policy: What was once labelled 'absurd' is now government policy in Wayne Swan's world The Australian April 22, 2012 12:19PM WAYNE Swan has been […]

23 April 2012
How one of world's biggest banks took PM Gillard's comments on RBA

While one rabid ALP economist tries to argue that when the PM publicly seeks easier monetary policy she is not looking for lower interest rates, and conveniently ignores the fact that this was precisely the briefing given by the PM's office to none other than the AFR's Laura Tingle, here is the objective assessment of […]

23 April 2012
Brilliant, must-read column by AFR's Bassanese taking on Paul Howes over RBA

Wow, this was a smoking column that I missed from the AFR's David Bassanese. It's certainly one of the best he's written. If you want to understand the political-economics swirling around the RBA right now (despite near full employment and average lending rates), read this. Blind Freddy can see this has been a coordinated campaign […]

23 April 2012
Terry McCrann and the inexorable undermining of the RBA

Terry does a good job defending the RBA's long-standing commitment to inflation-targeting, which, as I have predicted for years, is now being publicly challenged by vested interests, in an opinion piece for The Australian here. He covers important historical territory, much of which I have surveyed myself in past columns. He nevertheless omits the interesting […]

23 April 2012
Koukoulas's contradictions...

I will leave you to judge Stephen Koukoulas's contradictory statements in his (characteristically reflexive and personalised) defence of his former boss. In response to my observation – echoed by The Australian Financial Review and the Wall Street Journal – that the PM had "called on the RBA to lower interest rates" Koukoulas says: Well Chris, the […]

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