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Economic research

Hear from QTC’s economists about topical issues important to the global and Australian economies, and financial markets. QTC’s economists write a broad range of articles on the macroeconomy, monetary policy and markets, drawing insights from key resources and economic models. We share research in these areas for our public-sector clients and the investor community.

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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?

The demand-supply imbalance in the Australian economy

Michael Anthonisz, QTC Chief Economist
Published: 6 April 2022
9 min read

COVID-19 was one of the biggest health and economic emergencies of the last century. One of its legacies is how profoundly it has affected the demand for and supply of goods and services. In this piece, QTC’s Chief Economist Michael Anthonisz constructs estimates of demand and supply conditions in Australia. He examines how these have evolved over time and assesses what the implications for inflation might be of the imbalance between the demand and supply.

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.

What’s down with Australian inflation? 

Trent Saunders, QTC Principal Economist
Published: 25 March 2021
5 min read

 

Inflation has remained stubbornly low in Australia over the past five years, with various cyclical headwinds and structural factors weighing against the stimulatory effects of historically low interest rates. These forces are likely to continue to weigh on inflation over the coming years, prolonging the time until we see an increase in the cash rate.

In this note, we take a closer look at what has underpinned low inflation outcomes to assess where we might need to see increases if inflation is to return to its target range. A key result is that low inflation over the past five years is largely explained by a weak labour market.

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.