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Predicting interest rate movement is an important activity of economists (while I have studied a lot of economics I am not an economist) and while getting consensus from economists is akin to knowing the mind of five children at the one time the general economic sentiment, and common economic data, would lead to a conservative conclusion that the most likely next movement of interest rates will be up.

On Wednesday the front page of the Financial Review (AFR 16/10/13 “Markets bet on rates going up”) stated clearly what the general opinion is, rates will go up not down it is just a matter of when.  Inside the paper though there were also articles that hypothesise a longer hold, and another lonely voice saying they should actually go down more.

However, the sentiment more accurately is for a hold on interest rates until early 2014 before an increase is made.  Although, if you are a punter then the Melbourne Cup day RBA Board meeting could see an early adjustment.

By the way given my comment above about rarely getting consensus from economists it was very interesting to see the Alfred Nobel Academy awarded the Nobel equivalent prize for economics to be shared by three economists.  The fact they are sharing is not at all unusual, but in this case all three worked on and theorised market volatility except from three different perspectives, two diametrically opposed to each others theories.  So you see even at Nobel Prize level economic theory economists often cannot achieve consensus.

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