The interest rate increases are coming thick and fast, the dollar is being pounded and global sharemarkets are swinging wildly from day to day. No wonder business confidence has fallen in a hole and consumers are getting nervous.
Many economists share their anxiety.
But looking purely on domestic fundamentals and recent economic history, there is cause for some optimism. The four interest rate increases in six months have clearly worried borrowers and businesses but they pale in comparison to other, earlier phases of monetary tightenings. As the graph shows, the far bigger increase in rates in late 1994 saw economic growth, retail sales and the growth in house prices take a dive. Jobs growth also moderated. But they didn't descend to levels which would cause alarm and the economy and they subsequently bounced back, producing the longest run of 4 per cent-plus growth on record.