Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Saturday, 28 March 2015

US rate hikes pushed out?

GDP decelerates in Q4

The US Bureau of Economic Analysis released its third Q4 GDP estimates overnight.

After the rip-snorting result in Q3 where real GDP was estimated to be rising at some 5.0 percent, the third estimate for Q4 showed real GDP to be tracking at a more sedate 2.2 percent.

The increase in Q4 real GDP reflected positive contributions from consumption ("PCE"), non-residential fixed investment, exports, state-&-local government spending, and residential fixed investment.

However those gains were partly offset by negative contributions from federal government spending and private inventory investment. Imports - which are a subtraction in GDP calcs - also increased.

When charted in billions of chained 2009 dollars, the steady recovery in the US economy is apparent.

In recent months the headline rate of US unemployment has tumbled to just 5.5 percent, we have recently seen the strongest US jobs gains in 17 years, and US job openings ("JOLTS") are at the strongest level since 2001.

Refer to the links embedded above for analysis of each data release.

When will the Fed hike?

The key question, then, is not if but when the US Federal Reserve will begin to hike interest rates. The Fed's Janet Yellen noted overnight that the Fed will likely begin to hike rates this year, but gradually.

Reuters provided a neat summary of Yellen's luncheon thoughts here. Interestingly, Reuters analysis showed that the speech was evidently spiced with a dovish tone.

If this proves to be correct and US rate hikes don't materialise until later in 2015, this may serve to add further pressure on the Reserve Bank of Australia (RBA) to cut rates again.

Domestically our cash rate future markets are fully pricing two more interest rate cuts before the end of this calendar year.

Murmurings in the media suggest that rates could be on hold in April as the RBA awaits more data - specifically on inflation and the housing market - potentially teeing up a rate cut for the May meeting.