Why the cash rate could hit 5pc before the RBA is done

On December 9, 2021, Coolabah’s internal research team presented highly contrarian analysis regarding where the Reserve Bank of Australia would take interest rates over the coming years. This was part of a weekly “hunger games” competition that we run every Thursday where three individuals are randomly selected to pitch their best idea.

Coolabah chief macro strategist, Kieran Davies, had pulled together 24 slides of sophisticated economic modelling that argued the RBA’s cash rate would likely have to soar much further than market participants, or the RBA itself, expected. He further forecast a demand-side-driven inflation break-out powered by excessively strong wage growth.