Labor’s inflation war falls short
Failure to seriously address the biggest and most pressing problem confronting the economy could have devastating consequences.
Failure to seriously address the biggest and most pressing problem confronting the economy could have devastating consequences.
Having delivered a shock-and-awe campaign of hefty interest rate increases since May, the central bank chose to slow the pace of policy tightening at its latest board meeting.
Reserve Bank of Australia governor Philip Lowe came out swinging at his detractors on Thursday, defending his handling of monetary policy over the past year.
All indicators point to a fourth consecutive 50 basis point increase in the official cash rate next week as the latest data shows the RBA’s big guns have had little impact.
Rising inflation and surging rates are a problem, but the outlook will be made infinitely easier by the fact that every worker who wants a job can find one.
The Reserve Bank’s shock-and-awe campaign of consecutive 50-basis-point interest rate increases to cool off inflation is coming to an end.
The darker side of this week’s inflation numbers makes it doubtless the RBA will keep raising rates at speed this year and the next.
Even with inflation growing at its fastest pace in 30 years and rates rising at a fearful speed, the anger directed at the RBA is a bit over the top.
Tinkering with the inflation target now, or even suggesting it could be changed, runs the risk of undermining the RBA’s ability to contain inflation expectations.
The first internal review of the Reserve Bank of Australia since the 1990s comes at the worst time imaginable for the central bank.
Original URL: https://www.theaustralian.com.au/author/james-glynn/page/7