The Fairfax Press is reporting that analysts at Goldmans Sachs have turned bullish on the Australian economy for 2017 and upgraded their growth forecasts for the next four years thanks to the unexpected surge in commodity prices.

However, if anyone should know about unexpected movements in commodity prices its Goldmans.

The bank declaring to clients and the media in February 2016 that coal was in an “irreversible” bear market with prices to “remain under pressure” for the long term.

Since then coal prices have gone gangbusters on the back of falling production and increased demand with coal miner Whitehaven Coal Ltd (ASX: WHC) up around 500% in just 9 months.

Now though, Goldmans expects the recently rising commodity prices to set off a positive “chain of events” for Australia’s economy.

The expected scenarios include a federal government taxation windfall, greater investment in coal production, rising employment, wages, and consumer inflation.

Goldmans’ commodity team also reportedly now calculating that if coal and iron ore prices remain steady until the end of 2017 then that could be the “equivalent to a 3 per cent boost to nominal GDP”.

Evidently though making macro-economic predictions based on the direction of commodity prices is fraught with danger and investors should not extrapolate recent commodity price movements for guidance as to where an economy may go in the medium term.

Whether Goldmans has more luck with its latest prediction is hard to know, although recent commodity price rises do carry some important consequences in that they are likely to support price inflation, the nation’s terms of trade, and demand for the Aussie dollar.

All this suggests the Reserve Bank may be done cutting cash rates with the RBA Governor himself recently stating that he saw no case to cut rates further unless inflation takes a serious turn for the worse.

For investors this means that the traditional yield plays like Telstra Corporation Ltd (ASX: TLS), Transurban Group (ASX: TCL) and Westfield-operator Scentre Group (ASX: SCG) may remain under selling pressure as expectations for the direction of cash rates adjust to the changing macro-economic environment.

The direction of the major commodity plays like BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) is also anybody’s guess, because (as Goldmans knows) the prices of commodities move in mysterious ways.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.