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John Abernethy

Inflation is just a convenient excuse for rate rises

Dogma and hope, rather than logic, are driving many central banks to dramatically raise interest rates.

John AbernethyContributor

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While the Reserve Bank of Australia has set off with enthusiasm on what might be a two-year journey to higher cash rates, it does not seem to know where cash rates will ultimately end.

More importantly, the RBA apparently has little idea whether it can move interest rates above inflation (signalling “normalisation”) or indeed where inflation is likely to plateau in the future.

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John Abernethy is a director of Clime Asset Management.

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    Original URL: https://www.afr.com/wealth/personal-finance/inflation-is-just-a-convenient-excuse-for-rate-rises-20220620-p5av5z