Huge clue RBA boss Philip Lowe is in trouble

Treasurer Jim Chalmers says a decision on RBA governor Philip Lowe will be made by mid-year amid public fury over rising rates.

Treasurer Jim Chalmers says a decision on Reserve Bank governor Philip Lowe will be made by mid-year after he found himself ducking questions about his future following public fury over rising interest rates.

Mr Chalmers said before the decision would be made there would an initial review of the Reserve Bank made by the federal government that would be delivered to him by March 31, followed by the federal budget. Dr Lowe's term would be reviewed subsequent to that.

It follows a report in the The Sydney Morning Herald that six Labor MPS had questioned Dr Lowe’s performance as governor after the Reserve Bank raised interest rates for a ninth consecutive time.

Some of the MPs put a deadline on Dr Lowe’s job of September.

He’s expected to face heated questioning twice this week by MPs on Wednesday at a Senate Committee and Friday at a House Committee.

Dr Lowe previously issued an apology in November for suggesting that the central bank’s cash rate would stay at 0.2 per cent until 2024, when instead it started rising in May 2022 and is already at 3.35 and expected to rise further.

When pressed on the ABC Insider’s program on Sunday over whether Dr Lowe was performing his job properly, Mr Chalmers stated he had a difficult role but wouldn’t endorse him.

Philip Lowe’s job will be reviewed mid-year. Picture: Mark Graham/Bloomberg via Getty Images

“He’s got a hard job to do. He’s got to balance getting on top of this inflation challenge without crunching the economy … I’m not going to second guess the Reserve Bank governor,” he said.

“I genuinely respect his independence, as I’ve said probably hundreds of times, in opposition and now in government. I think that’s an important feature of the system.”

Treasurer Jim Chalmers said Mr Lowe has a difficult role. Picture: Gary Ramage/NCA NewsWire

Earlier in the week, Australians reacted to Dr Lowe’s interest rate apology with fury, with many now calling on the RBA boss to resign – or even face legal action.

On Monday morning, Dr Lowe issued an apology to Australians who took out a mortgage – during a period of record property prices, no less – based on the RBA’s repeated insistence that the official cash rate would not increase until 2024.

Dr Lowe said it was “regrettable” that Australians “listened to what we said” – leaving many gobsmacked.

People were not happy with the rate rises. Picture: Gaye Gerard/NCA NewsWire

Time for RBA governor to GO

“Reserve Bank governor Philip Lowe has apologised to Australians who may regret taking out a home loan off the back of claims interest rates would remain unchanged until 2024”

Time for the Class Actions to BEGIN#auspolhttps://t.co/YX2jJ8NqKk

— Craig Kelly (@CKellyUAP) November 28, 2022

I see the millionaire Philip Lowe is now apologising, for being so heartless, too late mate you have done the damage to ordinary families time for you to fall on your sword and hand over to someone competent

— stephen (@johnsy123aus) November 28, 2022

“I’m sorry that people listened to what we said and then acted on that and now find themselves in a position they don’t want to be in,” he said.

“Looking back, we would have chosen different language. People did not hear the caveats. I thought it was clear … but the community didn’t think it was clear.

“Well, they thought it was clear we weren’t raising rates until 2024. That’s a failure on our part.”

However, Dr Lowe – who doesn’t have a mortgage and earns a whopping base salary of $911,728 – defended his actions, arguing that when he made the comments the economy was facing “dark times” and said that inflation was unlikely to pick up quickly.

Originally published as Huge clue RBA boss Philip Lowe is in trouble