Two main interpretations have emerged from readers of the Reserve Bank’s quarterly economic statement, released yesterday.
Rate hike
The Economy: RBA, US Fed meet – rates and market turmoil in the crosshairs
Monday was another bloody day in Australia’s equity markets but last night on Wall Street saw a rally, with rises on equity prices generally exceeding 2%. The relief is palpable, although there is more volatility to come.
The Economy: Markets and the assumed rate hike
Friday saw another ugly day on Wall Street. This follows what was until then a fairly average 8% “correction” in a bull market. Today should again be another down day and if Wall Street is off again tonight, pundits will be looking at the possibility of the “correction” turning into a crash.
The Economy: Rate hikes to come
While the global outlook is for strong, non-inflationary growth, China’s economy is overheating (goods and services inflation 4.4%), the US economy is struggling with the fallout from indiscreet (“sub-prime”) lending with the ripples spreading to Australia thanks to the losses of highly praised hedge funds.
