ANALYSIS: Happy, sad, afraid, frustrated or confused? The economy has Australians feeling it all
But here's where it gets a bit scary. We simply don't know how the Australian economy is going to hold up over the next six months.
"Whilst this is encouraging news it takes time for the aggressive rate increases already seen to properly wash over economies and we would expect to see a slowdown in economies for the back part of this year," he says. How do we know this? Brace yourself for a gnarly bit of financial markets jargon but it's to do with an inversion of the yield curve.The cash rate is 3.6 per cent and the 10-year bond rate is 3.3 per cent — a 0.3 per cent difference.To put that in context, in a growing economic environment, the 10-year bond rate would be much higher than the cash rate. That is, higher interest rates are needed to manage a hot and growing economy.
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