Bill Evans is worth listening to: as Westpac's chief economist, tellingly he predicted that rates would be slashed this year (when others were predicting runaway inflation and multiple rate hikes: oops).
FOUR interest rate cuts would see the cash rate all the back down to 2.75%, and with the Aussie dollar finally having eased back to 6 month lows at below 97.50 US cents, it's an outcome that most certainly is not out of the question.
Note what Evans is hinting at below: a two-speed economy (i.e. mining doing pretty well, retailers and everyone else up the swanny). Watch this space!
''You can't ignore what's going on in the market. There's a fair degree of disquiet,'' Mr Evans said. ''Monetary policy is too tight given the shock to confidence and fragility of the economy. Retail has lost its momentum, house prices have edged off, capital spending is quite soft excluding mining.''