In The AFR today I highlight the RBA's about-face on the housing market's strength---consistent with our projections---and how this echoes the central bank's 180 degree turn on the importance of the supply-side of the market (they rejected my supply-side theses in a report for the Prime Minister back in 2003 only to subsequently accept them). What is interesting in this episode is to see ANZ pony-up and actually criticise the central bank for "understating" housing risks, which is rare for sell-side economists with 60% of their assets invested in residential mortgages (Goldman and AMP have also questioned the RBA's housing calls following our criticisms over the last couple of months). I also dive into the latest US inflation data, which confirms our forecasts for a sustained increase in US price pressures that forces a re-rating at the long-end of the yield curve (fixed-rate Aussie government bond values fell 0.4% in September and are down a chunky 1% or 100 basis points further in the first 9 days of October). Free: (VIEW LINK)
Christopher Joye is Co-Chief Investment Officer of Coolabah Capital Investments, which is a leading active credit manager that runs over $2.2 billion in short-term fixed-income strategies. He is also a Contributing Editor with The AFR.