AustralianSuper’s Mark Delaney is warning that growth is set to slow as the global economy approaches the end of a 13-year bull market.
with a 50 basis point increase in the cash rate target to 0.85 per cent, and indicated inflation would peak higher than the 6 per cent forecast in May.
“We’re obviously going through a turn in the business cycle. We’ve got some external shocks that are coming through that are negative for the economy, on the supply of commodities in particular, but also supply chain disruptions that are feeding through to inflation.”Dr Hunter said inflation and higher interest rates would lead to lower growth in household spending, which would feed through to a reduction in planned business investment.
Falling house prices would also contribute to lower household consumption growth through the “wealth effect”, which is the tendency for people to spend more when they feel wealthier and cut back on spending when they feel poorer. Centre of Independent Studies chief economist Peter Tulip said Australia’s 3.9 per cent unemployment rate was unsustainably low, giventhat the non-accelerating inflation rate of unemployment sits between 4.5 and 5 per cent.
The markets veteran said valuations for technology shares were still expensive, despite the 29 per cent decline in the tech-heavy Nasdaq index since its November peak.“It hasn’t even got back to where it was pre-COVID,” Mr Delaney said. “These tech bubbles, and there’s been many of them in history ... They take quite a few years to work off. It doesn’t just happen in six months.”
“At the peak of COVID, the US Fed Funds rates was 0.25 per cent and the US 10-year bond rate fell to as low as 0.7 per cent. We can’t build retirement savings on those very low levels of interest rates,” Mr Delaney said, ahead of an appearance at an Australian Institute of Superannuation Trustees conference on Wednesday.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
‘Want real decisions’: Pulse shooting survivors mark grim anniversaryIn the aftermath of Buffalo and Uvalde, those who lived through the Orlando attack six years ago join calls for action
Read more »
Ash Barty steals the show as Big Freeze returns to packed MCG on Queen’s BirthdaySome of Australia’s biggest names including ashbarty and Eddie Betts have headed down the Big Freeze slide at the MCG as the FightMND fundraiser surpassed $1 million. 7AFL 7NEWS
Read more »
Warning over Centrelink call centres as Services Australia slashes contractsExclusive: Agency says decision to cut outsourced workload by 30% is due to reduced demand as unions warn of longer wait times
Read more »
Fiji's biggest security threat is 'devastating climate change, not conflict', the country's defence minister warnsFiji faces its biggest threat from 'devastating climate change' rather than conflict, the country's defence minister warned on Sunday at a high-level security summit in Singapore.
Read more »
Chinese meeting significant but 'long way to go' before relations thaw, former defence secretary saysA meeting of Australia and China's defence ministers marks the end of a diplomatic freeze, but the former head of defence warns the two countries have a long way to go.
Read more »
Australia’s housing obsession comes back to bite the banksA decades-long shift away from supporting small business and over-exposure to mortgages leaves the banks with little headroom as growth slows.
Read more »