Fund managers are convinced the Reserve Bank’s grip on a soft landing is slipping, triggering a scramble out of stocks linked to consumer spending, and mounting a challenge to its objective of keeping the economy on an “even keel”.

After governor Philip Lowe raised the cash rate to 4.1 per cent on Tuesday, tightening for the 12th time in 13 meetings, the bond market flashed a reliable recession indicator with the yield on two-year government debt exceeding the benchmark 10-year rate. It remained inverted on Thursday.