A stockpile of pandemic savings and the low jobless rate have allowed households and businesses to withstand higher borrowing costs and could enable the Reserve Bank of Australia to keep interest rates higher for longer to tame inflation.
The central bank’s semi-annual Financial Stability Review revealed that, overwhelmingly, homeowners were coping with the rapid increase in the RBA cash rate to 4.35 per cent, and businesses showed little signs of strain.
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Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney. Connect with Jonathan on Twitter. Email Jonathan at jonathan.shapiro@afr.com
John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
