1 00:00:03,430 --> 00:00:06,440 Sean Aylmer: Welcome to the Fear and Greed daily interview. I'm Sean Aylmer. 2 00:00:06,860 --> 00:00:09,049 Sean Aylmer: It's a very big week for the economy. The Reserve 3 00:00:09,050 --> 00:00:11,960 Sean Aylmer: Bank board met on Tuesday and then yesterday, the GDP 4 00:00:11,960 --> 00:00:16,140 Sean Aylmer: data for the December quarter was released. The economy grew by 3.4% 5 00:00:17,060 --> 00:00:19,840 Sean Aylmer: during the quarter, pretty much in line with expectations. With 6 00:00:19,840 --> 00:00:22,119 Sean Aylmer: so much information around this week, I wanted to get 7 00:00:22,120 --> 00:00:24,349 Sean Aylmer: a read on how the economy is travelling and what 8 00:00:24,350 --> 00:00:27,470 Sean Aylmer: to expect in the months ahead. Diana Mousina is the 9 00:00:27,470 --> 00:00:30,390 Sean Aylmer: senior economist at AMP Capital. Diana, welcome back to Fear 10 00:00:30,390 --> 00:00:30,850 Sean Aylmer: and Greed. 11 00:00:31,210 --> 00:00:32,040 Diana Mousina: Thanks for having me. 12 00:00:32,590 --> 00:00:37,580 Sean Aylmer: So, let's start with the GDP figures yesterday. The economy 13 00:00:37,580 --> 00:00:42,409 Sean Aylmer: expanded by 4. 2% last year. The pace in December 14 00:00:42,409 --> 00:00:48,560 Sean Aylmer: quarter was 3. 4%. I must say that 4.2% certainly had some remarkable volatility. 15 00:00:49,000 --> 00:00:51,370 Sean Aylmer: What do you make of the data? Is the economy 16 00:00:51,370 --> 00:00:52,160 Sean Aylmer: back on track? 17 00:00:52,630 --> 00:00:58,100 Diana Mousina: It's been a difficult period to analyze GDP growth since 18 00:00:58,100 --> 00:01:00,900 Diana Mousina: COVID broke out. And the reason for that is because 19 00:01:00,940 --> 00:01:05,160 Diana Mousina: you've seen these zigzag patterns in economic activity, and that's 20 00:01:05,160 --> 00:01:08,940 Diana Mousina: been a result of restrictions being imposed and then being 21 00:01:08,940 --> 00:01:12,669 Diana Mousina: eased on and off and then on and off again. 22 00:01:13,260 --> 00:01:17,300 Diana Mousina: So the big increase in the December quarter is unlikely 23 00:01:17,300 --> 00:01:20,150 Diana Mousina: to be repeated again because it just reflects the large 24 00:01:20,150 --> 00:01:22,459 Diana Mousina: fall in GDP growth that we had in the September 25 00:01:22,459 --> 00:01:25,130 Diana Mousina: quarter. And if you look through all the details, the 26 00:01:25,130 --> 00:01:28,809 Diana Mousina: states and the territories which had the biggest increase in 27 00:01:28,810 --> 00:01:31,459 Diana Mousina: growth were New South Wales, Victoria and the ACT and 28 00:01:31,459 --> 00:01:33,509 Diana Mousina: they of course, were also the ones that had the 29 00:01:33,510 --> 00:01:37,230 Diana Mousina: lockdowns in the September quarter. The other states and territories 30 00:01:37,370 --> 00:01:40,759 Diana Mousina: either had very small falls or pretty much flat gains 31 00:01:40,760 --> 00:01:44,209 Diana Mousina: or some falls like there were in Western Australia, for 32 00:01:44,209 --> 00:01:48,740 Diana Mousina: example. So going ahead, the GDP growth numbers will be 33 00:01:48,740 --> 00:01:52,840 Diana Mousina: much more stable in 2022, I hope. I hope that 34 00:01:52,840 --> 00:01:56,090 Diana Mousina: we don't go into another lockdown. We can't rule that 35 00:01:56,090 --> 00:01:58,630 Diana Mousina: out obviously, but so far so good in terms of 36 00:01:58,630 --> 00:02:02,430 Diana Mousina: how Omicron is tracking. So expect a much smoother ride 37 00:02:02,450 --> 00:02:05,680 Diana Mousina: in growth for this year. We're looking for a pretty 38 00:02:05,680 --> 00:02:08,690 Diana Mousina: decent outcome for GDP up by about four and a half 39 00:02:08,690 --> 00:02:12,190 Diana Mousina: percent in 2022. I mean, that compares to a pre 40 00:02:12,290 --> 00:02:15,500 Diana Mousina: COVID trend growth rate of somewhere around two and a 41 00:02:15,500 --> 00:02:18,650 Diana Mousina: half percent. So we're in a much stronger position than where 42 00:02:18,650 --> 00:02:19,960 Diana Mousina: we were before the pandemic. 43 00:02:20,280 --> 00:02:23,320 Sean Aylmer: The economy itself is actually larger now than it was pre 44 00:02:23,320 --> 00:02:24,450 Sean Aylmer: pandemic. Isn't it? 45 00:02:24,830 --> 00:02:29,300 Diana Mousina: In terms of the value of GDP growth, yes, it is. There 46 00:02:29,300 --> 00:02:32,410 Diana Mousina: are some moving parts still. For example, if you look 47 00:02:32,410 --> 00:02:36,470 Diana Mousina: at the breakdown for consumers, you can see that consumer 48 00:02:36,470 --> 00:02:41,090 Diana Mousina: services spending is still below its pre COVID levels. Whereas 49 00:02:41,139 --> 00:02:44,300 Diana Mousina: the level of goods spending is well above its pre 50 00:02:44,330 --> 00:02:47,310 Diana Mousina: COVID trend. And that's because we haven't been able to 51 00:02:47,310 --> 00:02:49,730 Diana Mousina: spend on services like we normally would have on things 52 00:02:49,730 --> 00:02:53,780 Diana Mousina: like travel, on recreation as well. And I think that will 53 00:02:54,000 --> 00:02:57,810 Diana Mousina: be a much more important driver of GDP growth this 54 00:02:57,810 --> 00:03:01,090 Diana Mousina: year. We'll see some of that services spending be much stronger. 55 00:03:01,760 --> 00:03:05,040 Sean Aylmer: Okay. So in terms of, just quickly, the December quarter, 56 00:03:05,370 --> 00:03:08,959 Sean Aylmer: household spending was strong and that was the main contributor 57 00:03:08,960 --> 00:03:09,820 Sean Aylmer: to growth. Is that right? 58 00:03:10,130 --> 00:03:13,359 Diana Mousina: That's right. It contributed about 3. 2 percentage points to 59 00:03:13,360 --> 00:03:16,560 Diana Mousina: quarterly GDP growth, as well as a very big increase in 60 00:03:16,560 --> 00:03:20,440 Diana Mousina: inventories. There was a rebuild from businesses. We had a 61 00:03:20,440 --> 00:03:24,110 Diana Mousina: large fall in the September quarter that was related to 62 00:03:24,110 --> 00:03:26,250 Diana Mousina: the lockdowns again, where a lot of businesses were drawing 63 00:03:26,250 --> 00:03:27,910 Diana Mousina: down some of those inventories. 64 00:03:28,450 --> 00:03:30,340 Sean Aylmer: Okay. So if we move into 2022, how do you 65 00:03:30,340 --> 00:03:33,360 Sean Aylmer: think this quarter is tracking, or this year is tracking? 66 00:03:33,919 --> 00:03:38,670 Diana Mousina: The consumer spending data that we have from bank credit 67 00:03:38,670 --> 00:03:41,920 Diana Mousina: card data, now the ABS also releasing this monthly household 68 00:03:41,920 --> 00:03:45,560 Diana Mousina: spending indicator, which has actually been quite useful in terms of 69 00:03:45,560 --> 00:03:49,460 Diana Mousina: its tracking for consumer spending. It did overestimate the December quarter 70 00:03:49,460 --> 00:03:51,730 Diana Mousina: of growth, but nevertheless, I think it's still a pretty 71 00:03:51,730 --> 00:03:53,750 Diana Mousina: good indicator and it's good to have a more monthly 72 00:03:53,750 --> 00:03:57,210 Diana Mousina: read on a broader set of consumer spending data that's 73 00:03:57,250 --> 00:04:00,200 Diana Mousina: not just the retail sector. I think the retail, the 74 00:04:00,200 --> 00:04:03,120 Diana Mousina: consumer, sorry, still remains in a very solid position for 75 00:04:03,120 --> 00:04:07,190 Diana Mousina: the March quarter. There's a big level of accumulated savings 76 00:04:07,190 --> 00:04:10,010 Diana Mousina: for consumers that can be drawn down on in terms 77 00:04:10,010 --> 00:04:13,420 Diana Mousina: of the construction sector. We expect more falls in residential 78 00:04:13,420 --> 00:04:17,290 Diana Mousina: construction in the March quarter because some of that high 79 00:04:17,290 --> 00:04:20,001 Diana Mousina: demand for building activity that was related to (inaudible) 80 00:04:20,150 --> 00:04:23,839 Diana Mousina: the last year is now starting to wind back. Business 81 00:04:23,839 --> 00:04:28,970 Diana Mousina: investment growth should be positive and solid. The last few 82 00:04:28,970 --> 00:04:32,120 Diana Mousina: years have seen pretty moderate levels of business investment, but 83 00:04:32,120 --> 00:04:34,200 Diana Mousina: I think we're in for a period of much stronger 84 00:04:34,200 --> 00:04:38,670 Diana Mousina: business investment environment. And that's what the CapEx survey is 85 00:04:38,670 --> 00:04:42,510 Diana Mousina: indicating to us in terms of its forward components. It's 86 00:04:42,510 --> 00:04:44,830 Diana Mousina: saying that business investment growth should be pretty decent over 87 00:04:44,830 --> 00:04:48,210 Diana Mousina: the next few years. Government sector will probably make smaller 88 00:04:48,210 --> 00:04:51,960 Diana Mousina: contributions to GDP. I thought it was interesting that in 89 00:04:51,960 --> 00:04:54,690 Diana Mousina: the December quarter, government spending was down by about 0. 3%. 90 00:04:55,810 --> 00:04:57,740 Diana Mousina: And that's the first time we've actually seen a fallen 91 00:04:57,740 --> 00:05:01,420 Diana Mousina: government spending since September 2017. So it's made a very 92 00:05:01,420 --> 00:05:05,790 Diana Mousina: large contribution to spending and GDP outcomes over the last few years. 93 00:05:06,150 --> 00:05:08,279 Sean Aylmer: Stay with me, Diana, we'll be back in a minute. 94 00:05:12,810 --> 00:05:16,229 Sean Aylmer: My guest this morning is Diana Mousina, senior economist at 95 00:05:16,230 --> 00:05:19,750 Sean Aylmer: AMP Capital. Okay. Now, the day before the Reserve Bank 96 00:05:19,750 --> 00:05:22,270 Sean Aylmer: board met and governor Philip Lowe put his usual statement 97 00:05:22,270 --> 00:05:26,940 Sean Aylmer: out, the bank certainly, if you just take away Ukraine 98 00:05:27,020 --> 00:05:30,040 Sean Aylmer: for a moment, is certainly pretty happy with how the 99 00:05:30,040 --> 00:05:31,960 Sean Aylmer: domestic economy is running. 100 00:05:32,570 --> 00:05:35,220 Diana Mousina: Well, we've heard a lot from the RBA recently, they 101 00:05:35,220 --> 00:05:39,670 Diana Mousina: released their statement of monetary policy that was speeches as well, and 102 00:05:39,700 --> 00:05:44,370 Diana Mousina: the testimony before parliament. So if we just compare how 103 00:05:44,370 --> 00:05:48,370 Diana Mousina: the RBA saw things in early February, the only major 104 00:05:48,370 --> 00:05:53,750 Diana Mousina: thing that's changed is the Russia- Ukraine war. We also 105 00:05:53,750 --> 00:05:56,500 Diana Mousina: had the wages update. The wages print for the December 106 00:05:56,500 --> 00:05:58,969 Diana Mousina: quarter was virtually in line with the RBA's forecast. And 107 00:05:59,620 --> 00:06:03,330 Diana Mousina: they've been looking for wages growth to slowly increase and 108 00:06:03,330 --> 00:06:06,020 Diana Mousina: wages growth is running at about 2.3% over the year, 109 00:06:06,430 --> 00:06:09,580 Diana Mousina: which is in line with their forecasts. So the only 110 00:06:09,580 --> 00:06:12,370 Diana Mousina: major change for them is Russia- Ukraine. And that is 111 00:06:12,370 --> 00:06:16,180 Diana Mousina: unlikely to have a big negative impact on Australian GDP 112 00:06:16,180 --> 00:06:18,860 Diana Mousina: growth. It will have other impacts through the exchange rate 113 00:06:18,860 --> 00:06:22,020 Diana Mousina: channel, through financial market sentiment, and then potentially the wealth 114 00:06:22,020 --> 00:06:25,859 Diana Mousina: effect from negative impact to stocks and the impact to 115 00:06:25,860 --> 00:06:29,300 Diana Mousina: people's portfolios from that. Just a general level of consumer 116 00:06:29,300 --> 00:06:33,160 Diana Mousina: confidence as well might be negatively hit, but Australia does 117 00:06:33,160 --> 00:06:35,479 Diana Mousina: such little trade with Russia. It's only worth about 0. 2% 118 00:06:36,330 --> 00:06:39,120 Diana Mousina: of our export, so it's unlikely to see a big 119 00:06:39,120 --> 00:06:42,930 Diana Mousina: change in our national trade balance. And of course, the 120 00:06:42,930 --> 00:06:45,850 Diana Mousina: inflation impact is the main one that the RBA would 121 00:06:45,850 --> 00:06:50,240 Diana Mousina: be looking for from the Russia- Ukraine tensions. Because how 122 00:06:50,240 --> 00:06:54,609 Diana Mousina: high commodity prices have been over recent weeks, prices for 123 00:06:54,610 --> 00:06:58,210 Diana Mousina: things like natural gas, for oil, for metals, and even 124 00:06:58,210 --> 00:07:01,910 Diana Mousina: some agricultural commodities have gone up quite significantly because those 125 00:07:01,910 --> 00:07:05,940 Diana Mousina: two regions or countries are such major suppliers of some 126 00:07:05,940 --> 00:07:07,159 Diana Mousina: of these commodities. 127 00:07:07,480 --> 00:07:10,220 Sean Aylmer: Okay. Just on that, shifting to the floods that we've 128 00:07:10,220 --> 00:07:12,950 Sean Aylmer: seen in Queensland and then along the coast of New 129 00:07:12,950 --> 00:07:16,300 Sean Aylmer: South Wales, what sort of economic effect will they have? Could 130 00:07:16,300 --> 00:07:18,450 Sean Aylmer: we see a spike in food prices, for example? 131 00:07:18,800 --> 00:07:22,260 Diana Mousina: Normally when you see a catastrophe like flooding, you do 132 00:07:22,260 --> 00:07:26,110 Diana Mousina: tend to see a short- term spike in fresh fruit 133 00:07:26,180 --> 00:07:29,510 Diana Mousina: and vegetable prices. So I do think that food inflation 134 00:07:29,600 --> 00:07:34,810 Diana Mousina: will be a strong contributor to March quarter inflation data, 135 00:07:35,210 --> 00:07:38,470 Diana Mousina: mainly on the headline side. So probably not too much 136 00:07:38,470 --> 00:07:41,650 Diana Mousina: of it will flow through into the core reading. So 137 00:07:41,680 --> 00:07:45,680 Diana Mousina: again, we're seeing this higher pressure for inflation over the next 138 00:07:45,680 --> 00:07:49,390 Diana Mousina: six months, both from the Russia- Ukraine conflict, and then 139 00:07:49,390 --> 00:07:52,179 Diana Mousina: also from the floods. The other impact of the floods 140 00:07:52,180 --> 00:07:55,920 Diana Mousina: is of course, the short- term negative hit to GDP 141 00:07:56,220 --> 00:07:59,680 Diana Mousina: via production and loss of consumer spending, loss of business 142 00:07:59,680 --> 00:08:04,430 Diana Mousina: investment that's related to that. But then after that initial downturn, 143 00:08:04,430 --> 00:08:06,260 Diana Mousina: you start to see a pickup when you get the 144 00:08:06,380 --> 00:08:10,340 Diana Mousina: rebuild coming through. So that could take maybe 0. 1 145 00:08:10,340 --> 00:08:13,960 Diana Mousina: or 0. 3 percentage points off GDP growth, but it doesn't change the 146 00:08:13,960 --> 00:08:14,810 Diana Mousina: overall story. 147 00:08:15,310 --> 00:08:18,130 Sean Aylmer: Okay. We've spoken about Ukraine and the floods. Is the 148 00:08:18,130 --> 00:08:21,740 Sean Aylmer: biggest risk to the out look still a new variant 149 00:08:21,910 --> 00:08:23,370 Sean Aylmer: of Coronavirus? 150 00:08:23,830 --> 00:08:26,540 Diana Mousina: I think the biggest risk is the Central Bank themselves. 151 00:08:27,600 --> 00:08:32,090 Diana Mousina: We normally tend to see crises or big downturns in 152 00:08:32,090 --> 00:08:38,059 Diana Mousina: economies as a result of Central Bank policy changes, usually 153 00:08:38,059 --> 00:08:41,720 Diana Mousina: large policy changes. We haven't had a rate rise in 154 00:08:41,720 --> 00:08:46,520 Diana Mousina: Australia for more than a decade and consumers have become 155 00:08:46,520 --> 00:08:49,809 Diana Mousina: accustomed to having low interest rates. A lot of consumers 156 00:08:49,809 --> 00:08:53,230 Diana Mousina: have taken out large mortgages as a result, level of 157 00:08:53,230 --> 00:08:57,250 Diana Mousina: household debt to income remains around its record highs. When 158 00:08:57,250 --> 00:09:00,080 Diana Mousina: you start to see rate hikes come through, it may 159 00:09:00,080 --> 00:09:02,710 Diana Mousina: be a shock to the system for some people. We 160 00:09:02,710 --> 00:09:06,319 Diana Mousina: are already seeing the fixed rates for mortgages rising. But 161 00:09:06,320 --> 00:09:08,449 Diana Mousina: when you start to see more rate hikes come through, 162 00:09:08,450 --> 00:09:10,720 Diana Mousina: it will flow through to variable rates and then even 163 00:09:10,720 --> 00:09:14,150 Diana Mousina: more to fixed rates. So there is a risk around 164 00:09:14,150 --> 00:09:17,030 Diana Mousina: the consumer outlook when interest rates start to rise. Now, 165 00:09:17,030 --> 00:09:20,560 Diana Mousina: we're not expecting rate hikes or the interest rate to 166 00:09:20,600 --> 00:09:24,480 Diana Mousina: go suddenly to four or 5%. We're at 0. 1% at the 167 00:09:24,480 --> 00:09:28,500 Diana Mousina: moment, but even a few interest rate hikes might still 168 00:09:28,809 --> 00:09:33,260 Diana Mousina: lead to some negative impacts to consumer spending. I think 169 00:09:33,260 --> 00:09:36,490 Diana Mousina: for the next year, the consumer outlook still looks pretty 170 00:09:36,500 --> 00:09:39,540 Diana Mousina: good because our prediction of rate hikes will be that 171 00:09:39,610 --> 00:09:43,559 Diana Mousina: they'll be quite slow. The cash rate will only end 172 00:09:43,559 --> 00:09:47,550 Diana Mousina: this year at 0. 5%, which is not very high. But the 173 00:09:47,550 --> 00:09:52,440 Diana Mousina: more rate hikes you get, the riskier the consumer situation becomes. 174 00:09:52,690 --> 00:09:56,060 Sean Aylmer: Okay. And your forecast is for an August rate hike? 175 00:09:56,650 --> 00:09:59,650 Diana Mousina: At this stage, we still think that the RBA wants 176 00:09:59,650 --> 00:10:04,270 Diana Mousina: to see another wages print and some more confirmation that 177 00:10:04,470 --> 00:10:09,610 Diana Mousina: consumer price inflation is tracking in the direction that they've 178 00:10:09,610 --> 00:10:14,910 Diana Mousina: been forecasting, so higher headline and higher underlying inflation. And 179 00:10:14,910 --> 00:10:18,510 Diana Mousina: we think that we'll see these confirmations when you get 180 00:10:18,510 --> 00:10:22,630 Diana Mousina: the next set of inflation data. The RBA doesn't want 181 00:10:22,630 --> 00:10:26,240 Diana Mousina: to rush into rate hikes because they've been undershooting their 182 00:10:26,240 --> 00:10:30,500 Diana Mousina: target of two to 3% since 2014. So they want 183 00:10:30,500 --> 00:10:33,280 Diana Mousina: to be sure that it's the right time to raise 184 00:10:33,280 --> 00:10:37,890 Diana Mousina: interest rates. Because there are still COVID related supply chain 185 00:10:37,929 --> 00:10:41,429 Diana Mousina: issues going on, which will pass through. Some of these 186 00:10:41,429 --> 00:10:45,020 Diana Mousina: supply chain problems look like... Well, they are starting to 187 00:10:45,020 --> 00:10:48,679 Diana Mousina: ease based on some of our leading inflation indicators and 188 00:10:48,720 --> 00:10:51,450 Diana Mousina: they're not likely to be impacting the inflation data as 189 00:10:51,450 --> 00:10:54,059 Diana Mousina: much in six months time. So there is genuine reason 190 00:10:54,059 --> 00:10:57,300 Diana Mousina: to think that inflation will start to come back down 191 00:10:57,300 --> 00:11:01,059 Diana Mousina: towards the end of this year and into early 2023. It's just that you'll 192 00:11:01,059 --> 00:11:05,320 Diana Mousina: see other inflationary pressures come through like wages growth because 193 00:11:05,320 --> 00:11:07,540 Diana Mousina: the economy is in such a strong shape. So the 194 00:11:07,540 --> 00:11:10,250 Diana Mousina: RBA just needs the confirmation that this is the right time to 195 00:11:10,300 --> 00:11:14,850 Diana Mousina: hike rates. I still think that the risk for interest rates 196 00:11:14,850 --> 00:11:16,900 Diana Mousina: is with an earlier rate hike. So we do have 197 00:11:17,240 --> 00:11:20,050 Diana Mousina: an expectation that the first hike will be in August, but we could 198 00:11:20,050 --> 00:11:23,530 Diana Mousina: see it come in June if the next set of 199 00:11:23,530 --> 00:11:27,590 Diana Mousina: wages and inflation data gets the RBA to worry that 200 00:11:27,590 --> 00:11:30,510 Diana Mousina: we're in for inflation shock like we're seeing in the 201 00:11:30,510 --> 00:11:31,470 Diana Mousina: US at the moment. 202 00:11:31,890 --> 00:11:34,880 Sean Aylmer: So what happens if they don't lift rates and we 203 00:11:34,880 --> 00:11:38,660 Sean Aylmer: get the inflation shock? What's that mean for we normal 204 00:11:38,660 --> 00:11:39,780 Sean Aylmer: people in the street? 205 00:11:40,270 --> 00:11:44,790 Diana Mousina: It means that in the medium term, the economy may 206 00:11:44,790 --> 00:11:48,140 Diana Mousina: be in a position where it overheats. That happens because 207 00:11:48,179 --> 00:11:52,120 Diana Mousina: the level of monetary settings and the fiscal settings that 208 00:11:52,120 --> 00:11:54,840 Diana Mousina: we've had over the past two years are too stimulatory 209 00:11:54,840 --> 00:11:57,740 Diana Mousina: for the economy. So you can start to see a 210 00:11:57,740 --> 00:12:02,080 Diana Mousina: higher inflation creep up everywhere and become unsustainable. And unsustainable 211 00:12:02,080 --> 00:12:05,360 Diana Mousina: inflation means rates that are running at four or 5% 212 00:12:05,400 --> 00:12:10,050 Diana Mousina: annual growth in prices. Much like you're seeing in parts 213 00:12:10,050 --> 00:12:13,189 Diana Mousina: of Europe and the US, where they have very high 214 00:12:13,190 --> 00:12:16,440 Diana Mousina: headline inflation, their core ratings are closer to four or 215 00:12:16,440 --> 00:12:20,959 Diana Mousina: 5%. Some big increases lately for them from energy costs 216 00:12:20,960 --> 00:12:24,220 Diana Mousina: in Australia has been quite shielded from these increases in 217 00:12:24,270 --> 00:12:27,570 Diana Mousina: energy prices. They've also seen big increases in rents and 218 00:12:27,570 --> 00:12:31,210 Diana Mousina: housing, and we haven't had that same situation here. But 219 00:12:31,309 --> 00:12:34,730 Diana Mousina: unsustainable inflation is negative for consumer spending, because it eats 220 00:12:34,730 --> 00:12:37,760 Diana Mousina: into purchasing power. Unless you're getting a four or 5% 221 00:12:38,130 --> 00:12:40,070 Diana Mousina: wage rise, but then you get into the situation where 222 00:12:40,070 --> 00:12:43,179 Diana Mousina: you get into a wage price inflation spiral and everything 223 00:12:43,179 --> 00:12:46,359 Diana Mousina: starts getting out of control. Then you risk these very 224 00:12:46,360 --> 00:12:49,290 Diana Mousina: high price rises continue for a long time. And that's 225 00:12:49,290 --> 00:12:51,559 Diana Mousina: just unsustainable for an economy. 226 00:12:52,010 --> 00:12:54,131 Sean Aylmer: Diana, thank you for talking to Fear and Greed. 227 00:12:54,131 --> 00:12:54,760 Diana Mousina: Thank you so much for having me. 228 00:12:54,760 --> 00:12:58,860 Sean Aylmer: That was Diana Mousina, senior economist at AMP Capital. This is 229 00:12:58,860 --> 00:13:01,520 Sean Aylmer: the Fear and Greed daily interview. Join me every morning 230 00:13:01,520 --> 00:13:03,350 Sean Aylmer: for the full Fear and Greed Podcast with all the 231 00:13:03,350 --> 00:13:06,360 Sean Aylmer: business news you need to know. I'm Sean Aylmer, enjoy 232 00:13:06,360 --> 00:13:06,510 Sean Aylmer: your day.