Regarding the credibility of the RBA, Chief Investment Officer, Charles Jamieson says: "We’ve lost a lot of international investors because of poor RBA communications and changes in forward guidance. It’s been an incredibly violent hiking cycle and because of the lag effect, we don’t have a good understanding of how much impact it will have on the economy."
Charlie challenges market consensus and does not believe central banks will shift swiftly to easing cycles given the elevated levels of inflation. While there are signs of inflation moderating, rather than accelerating, as was the case months ago with petrol prices, price growth may not fall fast enough for policymakers eager to meet their inflation targets.
He discusses the impact of rapidly increasing borrowing costs on fixed income markets and why sovereign allocations for portfolios are compelling.
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