By Greg Peel

"Citi economists are mindful that declining confidence could see activity weaken further and consider a cut in rates possible, though it isn't in their forecast, and they expect any easing would be fairly limited, given the economy's still strong medium-term outlook".

So say the Citi equity strategists this morning. That said, the strategists have selected a list of stocks they feel would perform best were a rate cut to occur. They are JB Hi-Fi ((JBH)), Harvey Norman ((HVN)), APN News & Media ((APN)), Ten Network ((TEN)), Australian Securities Exchange ((ASX)) and Stockland ((SGP)). A resultant fall in the Aussie dollar would also be most beneficial for ResMed ((RMD)) and CSL ((CSL)).

But will the RBA cut? We know Westpac is convinced it will, by 100 points into 2012, and we also know the interest rate futures market is "predicting" such. Other economists are more inclined to believe the RBA will simply remain on hold, and we know that the board was very close to raising its cash rate at the August meeting.

I am wary of the constant suggestion that futures markets are "predicting" rate cuts. Contrary to popular belief, futures markets really don't predict anything. Institutions and corporations exposed to rate movements use interest rate futures as a hedging tool to "lock in" rates. Clearly global uncertainty has led to fear that rate cuts might be necessary, which is why hedging has become more urgent. Such activity has pushed