Why should interest rates rise further when electricity prices (a key driver of inflation) are set to rise by more than 20 per cent from 1 July but fall in 2024?
Reading news headlines about the inflation challenge and the battle to bring it under control, sensible Australians might question the logic of the Reserve Bank of Australia’s monetary policy settings and the Commonwealth government’s fiscal response.
The RBA’s rhetoric suggests that it intends to move interest rates higher, to push against CPI related wage increases and lead our economy to the brink of, but not into, recession. If only we could believe it!
