Bond investors are predicting the Australian economy will weaken much faster than forecast by the Reserve Bank of Australia, but some experts argue that fears of dramatic job losses are overblown.
The three-year government bond yield, which reflects where the cash rate will be on average over the next three years, has fallen to 3.5 per cent, from a top of 4.2 per cent two months ago. This means investors anticipate between three and four interest rate cuts.
