Make no mistake: the upside surprise to core inflation of 1 per cent in the March quarter, above the Reserve Bank’s forecast of 0.8 per cent, is the governor’s and treasurer’s chickens coming home to roost.
The RBA started raising rates later, slowed rate rises earlier, and raised rates less than its peers. It has set monetary policy on a wing and a prayer.
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Steven Hamilton is assistant professor of economics at George Washington University and visiting fellow at the Tax and Transfer Policy Institute at the ANU.
