Hedge Clippings | 25 July 2025

25 Jul 2025 - FundMonitors.com

Next Wednesday sees the release of Australia's June quarter CPI - data that the RBA would have loved to have had in time for their last meeting, when, in a move that caught most economists out, Michele Bullock and her board voted 6-3 to...

25 Jul 2025 - Hedge Clippings | 25 July 2025

By: FundMonitors.com

Hedge Clippings | 25 July 2025

Next Wednesday sees the release of Australia's June quarter CPI - data that the RBA would have loved to have had in time for their last meeting, when, in a move that caught most economists out, Michele Bullock and her board voted 6-3 to keep rates on hold.

Since that July rate decision we've had a few more insights into the board's collective thinking - albeit with no indication or leak as to who voted which way. In the minutes of the July meeting, released earlier this week, they noted an expectation for headline inflation to pick up to around the top of the target range later this year, and remain there in 2026. While all members agreed the inflationary outlook would decline further, the debate was over timing.

Meanwhile, global concerns remain thanks largely to Donald Trump's policy announcements, even if the world - and markets - seem to be less reactive now to the constant back and forth as they become used to them. The RBA however are not so easily swayed, with "uncertainty"mentioned no less than nine times in the minutes of June's meeting

Caution - as it probably should be for central bankers - seemed to be a dominant theme, including the fact that having eased twice earlier in the year, a third cut in just "four meetings would unlikely to be consistent with the strategy of easing monetary policy in a cautious and gradual manner". Given the RBA's expectation that the cash rate will "decline to a little over 3% by mid-2026"(in other words, three cuts of 0.25% from here), they certainly didn't need to rush, in spite of the market's expectations.

Assuming next week's CPI number is clear-cut one way or the other, either the Board (or at least 6 of them) or the economists who got it wrong last time, will be able to claim "I told you so".

Although the RBA's language is unlikely to be prone to such colourful exuberance.

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Hedge Clippings | 18 July 2025

18 Jul 2025 - FundMonitors.com

Yesterday's release by the ABS of the June, Labour Force estimates for June which showed an increase in unemployment in trend terms to 4.2%, and to 4.3% in seasonally adjusted terms, had plenty of economists and commentators weighing into...

18 Jul 2025 - Hedge Clippings | 18 July 2025

By: FundMonitors.com

Hedge Clippings | 18 July 2025

Yesterday's release by the ABS of the June, Labour Force estimates for June which showed an increase in unemployment in trend terms to 4.2%, and to 4.3% in seasonally adjusted terms, had plenty of economists and commentators weighing into the Reserve Bank for not cutting rates 10 days ago, basically saying "I told you so!" - or more accurately trying to excuse themselves for getting their prediction wrong.

For instance, the ABC news quoted one economist (presumably one of the 32 out of 36 who got the RBA's call wrong) as saying "the RBA's decision to leave rates unchanged felt misguided in the moment and has aged like milk." There were plenty of others who presumably also had their professional ego's dented, making comments along the same lines.

We beg to differ on a number of counts:

Firstly, in their post-meeting statement, the RBA "judged that it could wait for a little more information to confirm that inflation remains on track to reach 2.5 per cent on a sustainable basis". That information - the June quarter CPI number - is due on the 30th of this month. Again, quoting from the RBA's statement, the board will "pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market".

Secondly, although the monthly unemployment number ticked up, overall, the employment market is strong. Employment growth over the past year to June is at 2%, close to the RBA's forecast of 2.1%. One month's employment data by itself is not sufficient to claim the RBA got it wrong - unless you're one of those who called it wrong, and want to justify why.

Thirdly, although you wouldn't notice it from the performance of the S&P 500, the level of global uncertainty remains high from both an economic and geopolitical perspective. That's unlikely to change any time soon.

So, waiting five weeks until the next meeting on the 12th of August seems pretty logical - and cautious. Even if the quarterly CPI does come in lower than - or as expected - the RBA isn't - and shouldn't be - in the guessing game. That's for the punters - and economists.

While on the subject of forecasting and getting things wrong, analysis of the performance of the 17 peer groups in AFM's database clearly shows that those who thought cryptocurrencies and digital assets were a worthless fad a few years ago have certainly been proven wrong:

(Source Fundmonitors.com. Average net returns of all funds in each peer group, assuming reinvestment to June 2025.)

Aside from the obvious outperformance of Digital Assets, led by DAFM's Digital Income Fund Bitcoin Class, which has provided investors 91.10%, 95.09% and 83.01% over the past 1, 2 and 3 years, the other interesting point to note is the reasonably consistent performance of each peer group, particularly over 1-3 years. Less so over 5 and 7 years, which include Covid-affected markets.

Headline figures such as these also obscure the extreme range of many other underlying funds' performances, and in many cases the volatility of individual funds' returns.

For instance, the Equity Long, large-cap global group produced an average return of 16.77% over 12 months to June, with performances ranging from 96.67% down to -6.11%. 3-year returns among the same peer group ranged from +38.76% down to +3.14%.

Meanwhile, while 1-year returns can sound attractive, all offer documents will advise investors to take a 5-7 years view when investing.

High returns are obviously attractive, but by themselves can mask drawdowns and volatility, which often don't match an investor's risk profile or tolerance.

Diversification is one potential solution, either across asset classes or peer groups. We spoke at length (25 minutes) this week with two managers in the alternative space, Simone Haslinger from East Coast Capital Management, a trend following futures strategy, and Clint Maddock from Digital Asset Funds Management. You can watch the video here.

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Hedge Clippings | 11 July 2025

11 Jul 2025 - FundMonitors.com

According to the AFR, 32 out of the 36 economists that they surveyed prior to this week's RBA board meeting got it wrong. That's not very encouraging if you're making decisions based on their advice, and certainly not good for your bonus...

11 Jul 2025 - Hedge Clippings | 11 July 2025

By: FundMonitors.com

Hedge Clippings | 11 July 2025

According to the AFR, 32 out of the 36 economists that they surveyed prior to this week's RBA board meeting got it wrong. That's not very encouraging if you're making decisions based on their advice, and certainly not good for your bonus if you were in a bank's dealing room trading or relying on the outcome. We suspect that privately there were red faces among the 32 wrong-footed economists, and some angry ones on their banks' respective dealing desks.

At the risk of saying "we told you so", they should have listened to our video in last week's Hedge Clippings, when we asked Seed Funds Management's Nick Chaplin, and Renny Ellis from Arculus Funds Management, their opinion, and most importantly, what they would be doing were they in Michele Bullock's chair? Their unanimous answer was "sit tight", and backing it up with sound logic and reasoning.

We asked them again after the RBA's board had voted 6-3 in favour of holding the line, and they're still not fully convinced there's a rate cut required in September, even though they believe there's a better chance next time around if there's more clarity on the numbers - particularly the June quarter's CPI due on 30th of July.

You can see both interviews below.

So how come so many experts - and it seems journalists - got it wrong? The journalists can be forgiven on two counts: firstly, they were led astray by the experts, and secondly, judging by some of the questions directed at Michele Bullock after the meeting, they were disappointed that their own mortgage repayments weren't about to be reduced.

Bullock and her board received some unjustified criticism (implied or otherwise) at the RBA's press conference, as she patiently explained the board's thinking, when she could have been much more direct in her responses. If her critics had taken the time to analyse the "RBA speak"in the board's post-meeting statements over the past six to 12 months, it would have been pretty clear.

Let's take one of the RBA's big concerns - "Uncertainty"- a word used over 50 times in their statements over the past 12 months, and a headline in bold, with an explanation to itself in every monetary policy statement for at least the past year. That leads one to conclude - if you hadn't already guessed - that central bankers don't like uncertainty.

Next, take Inflation. The RBA wraps up every statement with words to the effect "inflation is (or remains) the priority", sometimes also adding "full employment"into the mix. Again, how come everyone (or at least the 32 out of 36 economists in the AFR survey) focused on the new monthly inflation number for June of 2.1%? Ignoring the fact that the monthly data uses an incomplete data set, and the more reliable quarterly number for March was 2.4%, and also ignoring the fact that the RBA prefers the quarterly trimmed mean number, which came in at 2.9%.

It seems that the RBA is comfortable with the current employment outlook, at least as far as their dual mandate of balancing inflation and full employment is concerned. But full employment in itself is potentially inflationary, and central bankers, by their nature, are not risk takers. With only three weeks to wait for more reliable June quarter inflation numbers, and five weeks before their next board meeting, they judged they could afford to wait.

Will things be less uncertain by then? Possibly - in fact, with the exception of the CPI number, probably not. There is a complete lack of certainty over the eventual tariff numbers that will come out of the White House, and even in the unlikely event they are set in stone, a lag as the world - including the FED and Jerome Powell - waits to see how much damage they will or won't wreak on both the USA's and their trading partners' economies.

Although we don't think the Donald thinks of other countries, even allies, as partners. More like adversaries who've been "ripping off"America for decades.

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Hedge Clippings | 04 July 2025

4 Jul 2025 - FundMonitors.com

We have to admit that Donald Trump's had a good couple of weeks, culminating in the Big Beautiful Bill passing both the US Senate and Congress, and landing on his desk in time for the July 4th Independence Day celebrations. Add that to the...

4 Jul 2025 - Hedge Clippings | 04 July 2025

By: FundMonitors.com

Hedge Clippings | 04 July 2025

We have to admit that Donald Trump's had a good couple of weeks, culminating in the Big Beautiful Bill passing both the US Senate and Congress, and landing on his desk in time for the July 4th Independence Day celebrations. Add that to the Iran/Israel cease fire, a pending cease fire in Gaza, his centre stage position at the NATO conference, and he no doubt feels pretty pleased with himself.

Which is not unusual.

Ukraine seems to have lost its interest, and Elon's a distant memory who needs to go back to South Africa. His next challenge will be Jerome Powell at the Fed, who is proving a little troublesome in refusing to cut rates on Donald's say-so. However, strong jobs data in the US overnight, adding 147,000 jobs in June vs. an expectation of 106,000, and dropping the unemployment rate to 4.1% from an expectation of 4.3%, and a May figure of 4.2%, saw the market scotch chances of an imminent rate cut.

Powell has been keen to play a waiting game due to the uncertainty surrounding the outcome of Trump's tariff policy. A stronger US labour market may have just strengthened his argument. Even though Trump says letters are going out to US trading partners next week, it may still be some time before the inflationary effects flow through to the US business and consumer sector. For his part, Trump assumes exporters around the world will pay the tariffs, and the US will magically collect the proceeds at the border.

Back in Australia, a rate cut following next week's RBA meeting seemed all but assured earlier in the week, with all four big banks tipping a move, and with further cuts to follow before the year's end. The US employment data may have tempered that view somewhat, such that the market's saying it's no longer a certainty.

In the lead-up to the RBA's July policy meeting next Monday and Tuesday, we hosted Nicholas Chaplin from Seed Funds Management, and Renny Ellis from Arculus Funds Management to give their opinion in the current economic outlook and assess the likelihood and implications of a rate cut. Despite soft inflation data for May (2.1%), both guests urged caution, highlighting the strength of our own labour market, rebounding housing prices, and the broader economic stability.

While markets are pricing in a cut, both questioned the need for further easing given the current conditions, pointing out that GDP softness, not inflation, may be the real concern. They also compared the RBA's stance with the U.S. Federal Reserve, concluding that domestic factors should drive policy, not international pressure.

Although both Nicholas Chaplin and Renny Ellis thought the RBA would cut, they also both advocated a "wait and see" approach if they were in Michele Bullock's shoes. Despite market expectations, they cautioned that economic fundamentals do not yet warrant aggressive easing, especially with strong employment and stable inflation. Growth concerns exist, but they believe the RBA has room to observe data and remain flexible in its response.

You can read the full transcript of the interview here, or view the video here.

Either way, we'll know the answer next Tuesday afternoon at 2:30, when we will check back in with Nick and Renny to get their take on the decision, the Board's thinking, and where - or when - they think the next cut may be.

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Hedge Clippings | 27 June 2025

27 Jun 2025 - FundMonitors.com

Welcome to Hedge Clippings' last edition for the 2025 Financial Year! Firstly, let's address the weekly Trump comment. We don't always - in fact rarely do we - sympathise with The Donald, but his outburst this week, publicly...

27 Jun 2025 - Hedge Clippings | 27 June 2025

By: FundMonitors.com

Hedge Clippings | 27 June 2025

Welcome to Hedge Clippings' last edition for the 2025 Financial Year!

Firstly, let's address the weekly Trump comment. We don't always - in fact rarely do we - sympathise with The Donald, but his outburst this week, publicly dropping the "f" bomb directed at the leaders of Israel and Iran, showed his frustration. Realistically, he probably reflected the opinions of millions of others around the world, irrespective of which side one does, or doesn't support (if either). There can't be many people who were actually offended by the word itself, which is now so commonplace as to be part of everyday language on TV or in the media.

It just took Donald to use it on the lawn of the White House!

Once over in the Hague at the NATO meeting, Trump reverted to hammering Jerome Powell, calling him "a very average mentally person." with "a low IQ for what he does", and is very political. Basically, Trump dislikes Powell because he won't do as Trump wants him to. Meanwhile, to date, Powell and the FOMC haven't flinched, preferring to wait and see what the inflationary and economic outcomes are after the tariff pause due on July 9 for the rest of the world, and mid-August for China.

Meanwhile, Australia's monthly CPI for May came in this week at 2.1% for 12 months vs. the previous month's number of 2.4%, the same as the trimmed mean result, which was also down from the previous month's figure of 2.8%. One would have to think, in spite of the global uncertainty, that the RBA will not be as cautious as the US Fed when they announce the result of the next board meeting on July 8th.

Meanwhile, approaching the end of the financial year, equity markets both here and in the US are heading for another year of double-digit returns, each up over 13% for the 12 months to the end of May. That will make it three years in a row of returns in the 11-13% range, in spite of global volatility and uncertainty.

While it will be a few weeks before the funds' June returns, and therefore 12-month performances, hit the database, early anecdotal evidence suggests that the top equity-based fund managers will comfortably double, or in some cases triple, the returns of their respective indices.

Watch this space!

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Hedge Clippings | 20 June 2025

20 Jun 2025 - FundMonitors.com

The world is watching and waiting for Donald Trump to decide if he's going to make the most critical decision of his Presidency to date - whether to join in the bombardment/destruction of Iran's government, or succeed in convincing the...

20 Jun 2025 - Hedge Clippings | 20 June 2025

By: FundMonitors.com

Hedge Clippings | 20 June 2025

The world is watching and waiting for Donald Trump to decide if he's going to make the most critical decision of his Presidency to date - whether to join in the bombardment/destruction of Iran's government, or succeed in convincing the Iranian leadership to roll over and abandon its nuclear ambitions.

It's generally accepted that Trump loves being the centre of attention, but what we're now waiting to see is if he can multitask and be capable of focusing on multiple crises at the same time. While all the media focus this week has been on the hostilities between Israel and Iran, that has only served to push other issues into the media shadows.

Trump hasn't managed to fix Gaza or Ukraine, either because his attention span has moved on - or maybe he just doesn't want to and would prefer to let the combatants just fight it out, "like two children in the park". Or maybe it's just too hard, and he doesn't like being seen as a loser?

It was only a week or so ago that his major focus was sending the National Guard and US Marines into Los Angeles, before it switched to his birthday parade and the 250th anniversary of the US Army, which, depending on what media outlet you follow, was underwhelming.

Trump didn't get his way at the G7 meeting in Alberta, Canada (still by the way in Canadian hands) either, when his pal Putin wasn't invited, and he left early to sort out Iran - which as above, he's still not sure what he's going to do - or be able to do. "As soon as I leave here, we're going to be doing something. But I have to leave here,"said Trump. But not before taking a Parthian shot at Emmanuel Macron for daring to suggest that Trump was "leaving the G7 to get a ceasefire and then kickstart broader discussions"between Iran and Israel.

Trump's response: Macron was "publicity seeking"and "whether purposely or not, Emmanuel always gets it wrong."Maybe Trump should look in the mirror?

Elsewhere, Trump has a few other deadlines and timelines ticking. Whilst most countries are waiting for the final numbers on the US Tariff lottery, the 90-day deadline on the "pause"on reciprocal tariffs is set to expire on 9th July, and the US-China de-escalation due to end - or be resolved - in mid-August. To date, only the UK has a permanent trade deal signed, despite Trump and Starmer dropping the papers at their G7 trade announcement.

On the domestic economic front, Trump's not having much luck persuading Jerome Powell to dance to his tune either. The Fed President left rates on hold at 4.25% this week, against a backdrop of rising inflation, unemployment ticking up, and softening growth forecasts. Powell made it clear that the Fed would not move until the economic consequences of the tariff uncertainty became clearer.

What would Powell know, in spite of Trump nominating him as Fed Chair in November 2017 during his first term, but who he now describes as a knucklehead and stupid.

If nothing else, Trump's great fodder for Hedge Clippings. If only it weren't so serious.

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Hedge Clippings | 13 June 2025

13 Jun 2025 - FundMonitors.com

Following the overnight attack on Iran's nuclear facilities by Israel, the world has become a more dangerous place, although there are those who will claim that in the longer run, for Iran not to have a nuclear capacity (energy or arms)...

13 Jun 2025 - Hedge Clippings | 13 June 2025

By: FundMonitors.com

Hedge Clippings | 13 June 2025

Following the overnight attack on Iran's nuclear facilities by Israel, the world has become a more dangerous place, although there are those who will claim that in the longer run, for Iran not to have a nuclear capacity (energy or arms) will make it safer. Unfortunately, it's going to go one way or the other, so we'll never know which outcome is correct.

In the meantime, it certainly feels more dangerous, and even the US is shying away from becoming actively involved in the air or on the ground at this stage. Hopefully, that lessens the chances of escalation. Meanwhile, the immediate effect on financial markets was an inevitable after-market fall in US stock futures, and an almost 10% spike in crude oil prices, and a smaller increase in gold, now not far off US$3,500 per ounce.

Possibly of greater risk to US markets is the potential for the demonstrations against Trump's deportation orders and subsequent deployment of the National Guard and the Marines to escalate over the weekend, and spread to other states and cities. By all accounts, Trump is itching for a showdown at home, while avoiding one overseas.

Whether either or both of the above crises is sufficient to scupper Albo's chances of a meeting with Trump to discuss either tariffs, or the US review of AUKUS on the sidelines of the G7 leaders' meeting in Canada remains to be seen. The Australian government's sanctioning of two right-wing members of Israel's cabinet against the wishes of the US won't have helped his chances of success.

Meanwhile, looking at May's fund performance (which we accept is looking in the rear-view mirror) shows a positive month, particularly by the various equity peer groups.

While the ASX200 Total Return was up 4.2% for the month, and the S&P500 up 6.29% (taking their 12 month returns to 13.36% and 13.52% respectively), this is not surprising, but there were 20 or more funds with double-digit returns for the month, and close to 60% of equity based funds out performed the ASX200, while 94% of all funds produced positive returns for the month, and 91% over the past 12 months.

A selection can be found below.

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Hedge Clippings | 06 June 2025

6 Jun 2025 - FundMonitors.com

The minutes of the RBA's May meeting, released this week, revealed the board's focus on the uncertainty surrounding Donald Trump's Liberation Day tariff policies. Like everyone else, it isn't easy to know what the impact will be when Trump...

6 Jun 2025 - Hedge Clippings | 06 June 2025

By: FundMonitors.com

Hedge Clippings | 06 June 2025

The minutes of the RBA's May meeting, released this week, revealed the board's focus on the uncertainty surrounding Donald Trump's Liberation Day tariff policies. Like everyone else, it isn't easy to know what the impact will be when Trump himself can't seem to make up his mind what they'll eventually be.

What is generally accepted is that the outcome won't be positive for most countries, including ironically, the USA, even though Trump and his White House media team won't have a bar of that view. At a well-publicised event at a steelworks this week, Donald was promising workers the world - or his simplified version of it.

Elsewhere some people with a long track record of really understanding (and working) in the real world, including Jamie Dimon from JP Morgan, when warning of an impending crack in the bond market, were pointing to a different kind of outcome.

Even Trump's biggest reciprocal fan, Elon Musk, has joined the chorus of criticism. Now no longer head of DOGE, Elon seems free to speak his mind, including claiming that Trump was named in the Epstein files to confirm his point. Having reportedly spent $300m helping the Human Headline make it to the White House for the second time, and watching a decline in the price of Tesla since his inauguration in January, we wonder if he still thinks it was a good investment?

Now it turns out there's a full-scale war of words between the two on their respective social media platforms, it could get even uglier. Somehow it feels like Trump's presidency is turning into something we might watch on Netflix, which would be entertaining if it wasn't so serious.

Enough of Elon and Donald's personal issues. What was also on the agenda this week was a phone call between Washington and Beijing, possibly indicating some kind of tariff truce might be possible, while there seems no such backing down by either, or any, party over Ukraine's future. One wonders how many crises - personal or global - Trump can manage at one time?

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Hedge Clippings | 30 May 2025

30 May 2025 - FundMonitors.com

Donald Trump's second term continues to spring surprises, and dominate the media. In a major blow to Trump's "Liberation Day" announcement, the New York-based Court of International Trade has found that the US president had overstepped his...

30 May 2025 - Hedge Clippings | 30 May 2025

By: FundMonitors.com

Hedge Clippings | 30 May 2025

Donald Trump's second term continues to spring surprises, and dominate the media.

In a major blow to Trump's "Liberation Day" announcement, the New York-based Court of International Trade has found that the US president had overstepped his authority by imposing the tariffs. Not to be outdone, or overruled, Trump lodged an appeal and questioned the authority of the three judges of the court.

If it wasn't already difficult to guess what the eventual outcome of Trump's gyrations would be, now it's even more confusing. Trump loves disrupting the status quo, but he also hates losing.

On that basis, you'd have to say that he's had a disappointing week. On Thursday, he requested a meeting with Federal Reserve Chair Jerome Powell for the first time in his second term. Trump has previously described Powell as both a "fool" and a "major loser" and that the "end of his term can't come soon enough," ignoring the fact that he appointed him during his previous term in the first place.

If Trump was looking for some wins, in this case getting Jerome to drop rates, he wouldn't have liked the Fed's statement released after the meeting: "Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook." In other words, "You do your job, I'll do mine, which (by the way) you gave me."

Earlier in the week, King Charles III opened the Canadian Parliament and delivered a speech which was widely considered to be a rejection of Trump's wish to absorb Canada into the US as the 51st State. Although the speech was written by the new Canadian PM's office, and protocol demands that the monarch has to follow what's in it, you'd have to imagine it wouldn't have pleased the Donald greatly.

However, it might make for an interesting exchange over a cup of tea and cucumber sandwiches when he visits Buckingham Palace in September.

Elsewhere, Trump's not kicking as many goals as he'd hoped either. Apart from the media picking up on the TACO tag (Trump Always Chickens Out) given to him by Anthony Scaramucci (also a brief White House appointee during Trump's first term), it's now become known as the "TACO trade" on Wall Street. What Trump also hates is either being ignored, or even worse, ridiculed, although on the latter, you'd imagine he'd be getting used to that by now.

Sadly, Trump's foreign policy efforts aren't up to his pre-election rhetoric either, with the Ukraine war seeming no closer to a resolution after promising 53 times to end the fighting within a day of being elected, which he now claims was a claim made "in jest." Yesterday he couldn't say when that might be, but he's set Putin a two-week deadline - or else. Hopefully, Putin hasn't heard about TACO, but we suspect he already knows how to get the better of Trump.

And let's not even mention Trump's efforts on Palestine.

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Hedge Clippings | 23 May 2025

23 May 2025 - FundMonitors.com

This week's rate cut following the RBA's meeting on Tuesday was pretty much a fait accompli, and apart from one big bank economist who was backing a 50 bps move, it was widely expected. Had it not been for the election getting in the way,...

23 May 2025 - Hedge Clippings | 23 May 2025

By: FundMonitors.com

Hedge Clippings | 23 May 2025

This week's rate cut following the RBA's meeting on Tuesday was pretty much a fait accompli, and apart from one big bank economist who was backing a 50 bps move, it was widely expected. Had it not been for the election getting in the way, there's a good chance the RBA would have moved at their previous board meeting.

We ran a webinar immediately after Tuesday's decision featuring a panel of three well-respected fund managers - Nick Chaplin from Seed Funds Management, Winston Sammut from Euree Asset Management, and Alex Pollak from Loftus Peak. While there were no surprises regarding the outcome, there were plenty of interesting insights from them on the outlook from here. If you missed it, you can watch a recording from the link in the news section below.

For rate move enthusiasts, the focus now will be on how many more cuts there may be this side of Christmas. While the consensus is for two more, taking the cash rate down to 3.35% at least (assuming 0.25% each), it is worth remembering the consistent use of the word "uncertain" in the RBA's statement. Locally one big variable will be the strong labour market, with the ABS announcing wage and salary growth of 5.8% in the year to March.

Of course there's always an element of uncertainty in economic forecasting, but throwing in the unpredictability of Donald Trump's policy zig-zags and U-turns makes it particularly difficult to see far ahead.

Overseas, the FED's Jerome Powell is sticking to his guns given the uncertain effects of the US vs. China and the rest of the world's tariff policy. The Donald seems to have at last caught on that the uncertainty of both the magnitude and timing of the eventual outcome is harming the US economy as much as anyone else's. Trump loves to use the analogy of holding a strong hand in negotiations, but China (so far) seems to be holding their nerve.

There are a number of opinions on Trump, but it's worth listening to what Anthony 'The Mooch' Scaramucci, head of SkyBridge Capital, and who served as White House Director of Communications for just 11 days in July 2017 during Trump's first term, has to say. Actually, if you Google the Mooch, you'll find he has plenty to say about everything, but particularly Trump. One wonders how he has time to run SkyBridge given the time he spends on, or in, the media. As far as Trump vs. China is concerned, his view is that Trump will have to capitulate, although if and when that occurs there's no doubt Trump won't admit to it, or frame it that way.

For another view on China, it's worth reading, (here) or watching (here) Deputy Governor of the RBA Andrew Hauser's address to the Lowy Institute yesterday. Hauser is understandably less direct than Scaramucci, but having visited China just a week after Trump's (then) Liberation Day announcement, he was well placed to judge Chinese reaction first-hand. We suspect that beneath the RBA speak, Hauser may be at least on the same side, or hold a similar view as the Mooch.

Changing tack, it seems at last there's some pushback against the Treasurer's plans for changes to super balances above $3 million. The issue is not really about higher taxes (30%) on large balances. Most taxpayers accept that concept on their everyday wages and salaries.

It is probably not even about not indexing the $3 million level to adjust for inflation, because, as Chalmers points out, that can be left for future governments. The completely ludicrous, unfair, dangerous, and we would have thought unworkable aspect, is taxing unrealised capital gains.

Sadly, post-election, jumping up and down now is a classic case of too little, too late, or closing the stable door after the horse has bolted. What were the Liberals thinking by not making the most of that argument when they had the chance, rather than now, when no one is really listening to them? Although looking back at the election result, it seems not many (or enough) voters were listening to them during the election campaign either.

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