Currently,

• Australian CPI remains sticky and well above 5%.
• GDP momentum is slowing (current annualised GDP = 2%), but surging immigration will provide some support.
• Unemployment is at all time lows.
• Cash rate is rising, currently 3.6%, while the 10y peaked around 4% in Q4 2022.

However, for the first time in many years, the RBA cash rate is now higher than the 10 year rate. If this persist, it is flagging a recession is likely next year.

As a hedge for a global recession, which looks increasingly likely, I am adding AGVT to my portfolio. I am gritting my teeth a little at these levels, and will dollar cost average my entry.

The FOMC meeting is next week, and they will release their dot plot (forward guidance). This may come as a shock to the short end of the bond curve, if the US Fed continues its higher for longer mantra. Remember, the US economy is still resilient with strong retail, employment, and residential building data.