rba

Credit and equity markets both suffered a very bad 2022, as the collapse of negative correlation between stock and bond prices left no safe haven for investors. But 2023 could be a big year for bonds, and experts say investors waiting on the sidelines risk missing out.

A recent survey shows 74 per cent of Australian business leaders expect profits to increase in the year ahead, despite a still-challenging outlook and sticky inflation.

Household wealth in September recorded its third largest quarterly decline since the Australian Bureau of Statistics began keeping records in 1989. And wealth is likely to keep falling in the coming quarters, as the lagged effects of interest rate hikes flow through.

The RBA is keeping an open mind about a potential central bank digital currency in Australia, including running a pilot eAUD program next year. But many of the arguments in favour of a CBDC fall flat in the Australian context, says Assistant Governor Brad Jones.

The cost of living has risen dramatically in 2022, with the Reserve Bank of Australia increasing the cash rate seven times since April and the major banks keeping pace on mortgage rates. But there could be good news on the horizon.

Economists agree the outlook for house prices in 2023 is largely dependent on upcoming interest rate decisions by the Reserve Bank of Australia, and signs of weakness are already appearing. Complicating matters further, borrowers face an impending fixed-rate cliff.

Financial planners are advising Australians to diversify out of property and put more money into superannuation, as statistics show falling asset values contributing to a nearly $500 billion decline in household wealth for the June quarter.

With inflation, interest rate hikes and other economic stress weighing heavily on Australian households, key recent data show consumer sentiment approaching new lows while overall spending continues to climb.

The Reserve Bank of Australia is sticking to its view that inflation will be temporary, despite its poor forecasting track record. Economists aren’t so sure.

The idea of a soft landing for US rate increases will be music to the ears of investors and central banks.