Research
From boom to swoon – What the next phase of Australia’s economic cycle might look like
Michael Anthonisz, QTC Chief Economist and Trent Saunders, QTC Principal Economist
Published: 19 July 2023
5 min read
The sharp rise in interest rates in Australia has increased risks to economic growth. In this article, QTC economists Michael Anthonisz and Trent Saunders consider what the next phase of the economic cycle might look like for Australia, including what the probability of a recession may be and what scenarios might lead to this sort of outcome.
Passing the peak: Will the recent slowdown in inflation be sustained?
Trent Saunders, QTC Principal Economist
Published: 8 May 2023
5 min read
Inflation appears to have passed its peak, but how quickly will it fall from here? In QTC’s latest Economic Research article, Principal Economist, Trent Saunders looks at the different drivers of inflation to shed light on how persistent it could be and what this means for the outlook for interest rates.
Three questions for ’23
Michael Anthonisz, QTC Chief Economist
Published: 9 December 2022
10 min read
The last few years have seen incredible volatility and uncertainty. This is yet to fully subside and key questions remain around the economic outlook. In this note, QTC’s Chief Economist Michael Anthonisz seeks to answer three of the biggest questions for 2023.
How tight is the Australian labour market? And what does it mean for wages and inflation?
Trent Saunders, QTC Principal Economist
Published: 6 September 2022
6 min read
In this note, Trent investigates what measure of labour market slack is the best predictor of wages growth and inflation in Australia. I then assess what this means for the outlook over the coming year. I find that the job advertisements-to-unemployment ratio has historically provided the most accurate outlook, though other indicators provide similar insights. These indicators suggest that wages growth will pick up noticeably over the coming year.
Assessing US recession risks
Michael Anthonisz, QTC Chief Economist
Published: 30 May 2022
5 min read
The United States (US) economy has in recent decades experienced recessions associated with a variety of factors including oil price shocks (1974, 1980 and 1990), exuberant asset prices (2001), financial imbalances (2007) and a pandemic (2020). The common theme across all these however was that, prior to the recession, the Federal Reserve was called into action to lean against a strengthening economy by lifting interest rates.
Oil prices and inflation: Is Australia facing a crude shock?
Trent Saunders, QTC Principal Economist
Published: 26 April 2022
4 min read
Crude oil prices have increased sharply in recent months for Australia, with the price of Brent crude oil peaking in March at its highest level since 2008. In this piece, QTC’s Principal Economist Trent Saunders assesses what higher crude oil prices could mean for inflation over the coming years and answers questions like, will higher crude oil costs flow through to other prices in the economy?
Part 2 of 2 – How high could the RBA take the cash rate? Estimates of the neutral and terminal rate in Australia
Trent Saunders, QTC Principal Economist
Published: 22 February 2022
9 min read
This is the second of a two-part series by QTC’s Principal Economist Trent Saunders, which explores the longer-term outlook for the cash rate. This follows Trent’s previous article ‘Part 1 of 2 – An RBA hiking cycle: Some paths less travelled’ that discussed the expected timing of the initial increase in the cash rate and the path it may take over the next couple of years.
Part 1 of 2 – An RBA hiking cycle: Some paths less travelled
Trent Saunders, QTC Principal Economist
Published: 28 January 2022
9 min read
This is the first of a two-part series exploring the outlook for the cash rate. The RBA is expected to raise rates in the next 12 months but hiking cycles have been rare in the post-GFC period. In this piece, QTC’s Principal Economist Trent Saunders explores the different paths that interest rates could follow through a part of the policy cycle we haven’t faced for some time. He finds that the economy may be strong enough to justify cash rate increases from the second half of this year and that the cash rate could rise by a couple of percentage points over the next few years.
Assessing the probability of different inflation outcomes
Michael Anthonisz, QTC Chief Economist
Published: 13 September 2021
9 min read
Where will inflation be in two years? The RBA forecasts have it back within the two-to-three per cent target band. However, in the current environment, it is far from certain that this will be achieved. QTC’s Chief Economist Michael Anthonisz seeks to quantify the uncertainty over the outlook for inflation by estimating the probability of a range of potential outcomes two years from now.
What to expect when you’re expecting inflation
Trent Saunders, QTC Principal Economist
Published: 28 June 2021
6 min read
The outlook for inflation is highly uncertain. While business inflation expectations have increased to their highest level since 2008, other measures have experienced more modest gains. In this article QTC’s Principal Economist Trent Saunders assesses the historical accuracy of various inflation expectations to gauge how much focus we should put on these different economic signals. The results suggest that inflation is likely to reach the bottom of the RBA’s target band in the second half of 2022 and will be slightly above two per cent by the middle of 2023.
Daily nowcasting of global and Australian GDP growth
Michael Anthonisz, QTC Chief Economist
Published: 26 May 2021
3 min read
Over a year has passed since Australia saw the worst of the COVID-19 pandemic recession, yet economic conditions are still evolving quickly. In this article QTC’s Chief Economist Michael Anthonisz uses ‘nowcasting’ methods to gauge how global and Australian economic output is changing in real-time. These nowcasts show that both global and Australian GDP growth remains firm so far in 2021.
Re-assessing Australia’s economic recovery
Trent Saunders, QTC Principal Economist
Published: 29 April 2021
6 min read
Australia’s economic recovery has been swift, with leading indicators suggesting that this rapid rate of improvement could continue in the coming months. In this article, QTC’s Principal Economist Trent Saunders uses three scenarios to project what this unexpected strength could mean for the economic outlook and the RBA’s cash rate decisions through to 2030.
2030 Vision: Outlook for the economy and interest rates
Trent Saunders, QTC Principal Economist
Published: 18 February 2021
6 min read
In a world of uncertainty, it has proven difficult to see beyond short-term time horizons. In this article, QTC’s Principal Economist Trent Saunders explores Australia’s long-term path to economic recovery and alternate perspectives on how the economy and interest rates could evolve over the course of this decade. Using three scenarios and projections he takes a look at how the cash rate could move over the decade to 2030.