Opinion
The RBA now has good cause to pause
The RBA must neither overtighten nor let inflation quickly take off again. But historic labour demand is making the calls difficult
Warren HoganEconomistThe easy thing for the RBA board to do on Tuesday is nothing. After two ‘unexpected’ rate increases in succession, the political optics of monetary policy demand a break in this relentless cycle of tightening.
The RBA board must be cognisant of people’s perceptions about the institution. And after several missteps in recent years, the board is trying to do everything it can not to overtighten in this cycle, and just as importantly, must be seen to be doing everything not to overtighten in this cycle.
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