Pete Wargent blogspot


'Must-read, must-follow, one of the best analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for accurate & in-depth analysis' - David Scutt, Markets & Economics Editor, Sydney Morning Herald.

'I've been investing 40 years & still learn new concepts from Pete; one of the best commentators...and not just a theorist!' - Michael Yardney, Amazon #1 bestseller.

Thursday, 17 January 2019

Earth to Martin Place

Inflation expectations collapse

Dear, oh dear...

The market may now be beginning to price in further interest rate cuts; alternatively mortgage serviceability buffers may be relaxed, presently being at a minimum of 7 per cent. 

The breakeven inflation rate, a bond market based measure of inflation expectations, momentarily touched a low of under 1.50 in June 2016, and we're now not far from that point again in January 2019. 

Not to be alarmist, but markets are nervously beginning to eye up the very cold snap the housing slowdown was designed to protect from.