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What do you get when you throw a 36-year-fixed-income veteran into the room with a 26-year-old fixed-income zillennial? The Rate Debate.
Darren Langer and Jess Ren are seasoned fixed income specialists with a deep passion for bond markets and an opinion on just about everything. And while they may sit facing each other at work, they don’t always see eye-to-eye.
Tune-in each month to hear their take on the RBA’s interest rate decision and other macro matters influencing markets.
47 Episodes
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The RBA has scrapped any hints of potential further hikes, sparking speculation on whether it will continue to be open on hiking, despite pivoting to a more neutral guidance.In episode 47 of The Rate Debate, co-head of Fixed Income Darren Langer and Investment Manager Jessica Ren unpack the RBA's "shift in language" from a tightening bias to a neutral rate outlook, share their thoughts on the rebound of consumer confidence and evaluate the likelihood of a policy shift by global central banks this year.
The RBA may have started its new regime of two-day meetings and press conferences to improve transparency, yet the outcome remained the same as it was when it last met: no change to the cash rate.In the first episode of The Rate Debate for 2024, co-head of Fixed Income Darren Langer is joined by Investment Manager Jessica Ren to analyse the RBA’s new approach, unpick the labour market outlook, and discuss whether geopolitical tensions are likely to be the largest challenge facing central bankers in the year ahead.Find out more in episode 46 of The Rate Debate.
The RBA has granted a festive reprieve for mortgage holders, keeping interest rates on hold in line with expectations after inflation continued to slow. The year 2023 was characterised by a period dominated by inflation risk, geopolitics and monetary tightening. Will these economic conditions persist in the new year? In the final episode of The Rate Debate for 2024, Darren Langer and Jessica Ren discuss their outlook on the global economy, share their views on whether we can expect a hard or soft landing, and explain why now is a good time to own fixed income.
The RBA delivers a Melbourne Cup rate hike to curb persistent inflation. Rising energy and service costs are contributing factors, but the post-pandemic spending spree, favouring experiences over possessions, raises questions about “funflation” stoking inflationary pressures. Will higher rates further fan the flames? Darren is joined by his new sparring partner, Jessica Ren, to explore these dynamics and more in episode 44 of The Rate Debate.
September was a tough month for the fixed-rate bond market, but on the flip side, credit spreads narrowed. In this month’s episode of The Rate Debate, Darren is joined by senior credit portfolio manager Phil Strano to give their insights and discuss the impact of a default cycle as quantitative easing ends, and monetary policy starts to normalise.
Outgoing Reserve Bank governor Philip Lowe finished his tenure as he began by keeping rates on hold as inflation cools. With inflation past its peak, can we expect rate cuts on the horizon, and could a softening of China's economy bring them even closer or will services inflation drive the incoming governor Michele Bullock to deliver a rate rise later this year?Darren is joined by special guest Roy Keenan, Co-Head of Fixed Income, to explore this and the outlook for credit markets in episode 42 of The Rate Debate.
Amidst ongoing economic uncertainties, the RBA has seen fit to keep rates on hold for a consecutive month and wait to see how the lagging effects of 12 rate hikes play out.While inflation is decelerating, uncertainty abounds over consumer spending, falling productivity and wage growth. Will the central bank's aim to deliver a soft landing make it harder to get inflation back to target, meaning that this pause is short-lived?Darren is joined by special guest Phil Strano, Senior Portfolio Manager in charge of credit research, to explore this and more in episode 41 of The Rate Debate.
The RBA has paused on hiking rates (for now) creating some big winners and losers. This month Darren is joined by special guest Roy Keenan, Co-Head of Fixed Income, to identify the potential warning signs for lenders, discuss whether Australia's banks will remain "unquestionably strong", and examine which companies in the consumer sector will stand to win or lose.Darren and Roy discuss this and more in episode 40 of The Rate Debate.
Australia has been delivered another rate hike in an attempt to "quash" inflation. This month Darren debates with special guest Tim Toohey, Head of Macro and Strategy, the risks posed by rising wages and weak productivity growth, and why the RBA continue to change its goalposts to drive down inflation.
Hitting the economy with surprise after surprise, the RBA takes another fresh assault to tackle inflation head-on by taking the cash rate to 3.85%. Continued mixed signals from Australia’s central bank are causing havoc within the domestic economy. With the RBA not ruling out further rate hikes, Darren and Chris look into the impact on markets and discuss their thoughts on the future of the RBA in episode 38 of The Rate Debate.
Despite the RBA's massive rate "U-turn" and their insistence that we are in the final stage of the hiking cycle, has it come too late to stop a recession? Chris Rands and Darren Langer examine the factors influencing the market and reveal their expectations of the economy and the Australian credit market in episode 37 of The Rate Debate.
After hiking for the tenth consecutive month, the RBA has Australia questioning whether its repeated actions to combat inflation will cause an overshoot and push the nation into recession. From a wage-price spiral, rising unemployment, and faltering GDP, it seems the consumer and government sectors have been the most exposed to the ongoing "inflationary pulse". Do we think Australian companies will lead the charge and are we starting to see Fixed Income revert to more atypical behaviour following a challenging 12 months? Chris and Darren debate this and more in episode 36 of The Rate Debate.
At its first meeting for 2023, the RBA hiked rates for the ninth consecutive month to urgently tame inflation, telling the market to expect more to come. Given Australia’s inflation levels have lagged the US, is Australia six months behind? or are we going into a period of higher inflation than the rest of the world?Chris and Darren debate this and more in episode 35 of The Rate Debate.
The RBA delivered an eighth-straight rate hike to hit a 10-year high to round out a tumultuous 2022. In the final episode of The Rate Debate for the year, Darren and Chris discuss their thoughts on further tightening next year, whether a global recession could solve the inflation problem and the impact of the fixed-rate mortgage cliff on Australian homeowners and the domestic economy.
The RBA hiked rates for the seventh consecutive month as it seeks to stifle inflation. Global central banks continue aggressive monetary tightening despite early signs of moderating inflation and weaker forward growth indicators. With the consumer bearing the brunt of high inflation and tighter financial conditions, the RBA has backed away from aggressive rate hikes for now. Will other central banks follow, or is this a temporary reprieve?Chris and Darren debate this and more in episode 33 of The Rate Debate.
The RBA hiked rates for the sixth consecutive month. With lead indicators showing signs of inflation coming off the boil and European banks starting to see stress, cracks are forming in the credit and equity markets. Have central banks tightened too aggressively risking a recession?Chris and Darren debate this and more in episode 32 of The Rate Debate.
Australia’s central bank has now raised interest rates five months in a row. It’s the most aggressive tightening cycle since 1994. With more hikes expected, and house prices in Sydney and Melbourne on the slide, cracks are starting to appear. Chris Rands and Darren Langer discuss how further rate hikes will impact the housing market, unemployment rate, and the wider economy in episode 31 of The Rate Debate.
After hiking for the fourth consecutive month, the RBA’s tone has shifted to suggest a pause at the September meeting is possible, reflecting in part the troubling signals emanating from markets as the US teeters on the brink of recession and conditions continue to cool across the globe. As lead indicators continue to flash red – consumer confidence remains at alarming levels and housing is rolling over – can Australia’s central bank successfully thread the needle and avoid an outright stalling of the Australian economy?
Central banks state they are not seeing signs of a recession as they continue hiking rates to curb spiralling inflation. But, with forward indicators flashing red across the board, low consumer confidence, declining forward sales, the US yield curve beginning to invert and the continued drop in the global equities, markets are telling us they see slowing growth ahead. Will the RBA pause in August or will they continue to tighten at the fastest rate we have seen in 30 years and drive the country into a recession?
With rates on the rise, higher inflation and wages below expectation, has Australia's central bank panicked by hiking rates by 50bps, the largest monthly move in over 20 years? The RBA's charter is to ensure the economic prosperity and welfare of the Australian people, which increasingly appears to be being overlooked in favour of an inflation target that isn't easily achievable without causing recession. Darren and Chris discuss this and more in episode 28 of The Rate Debate.
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