WEEKEND ECONOMIST: Consumers' call

The release of consumer sentiment data next week will provide a major test for interest rate forecasts, as history shows confidence has been a good guide to rate cycles. Sentiment looks set to fall, which suggests the RBA may pause in February.

The Statement which the Governor released at the time of the decision included a slightly more positive assessment of the economic outlook than had been the case at the time of the previous rate hike in November (house prices; government spending; household wealth).


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