The economist who called for RBA governor Philip Lowe to resign admitted it would be a “disaster” for the economy, but he is not alone in calling for board members to go.
commitment that interest rates would not be increased for three years after the onset of the pandemic.The unconventional tool policy involved pegging the three-year government bond rate – then 0.1 per cent – to the overnight cash rate target. It was underscored by formal guidance reinforced by the governor in policy decisions.Not alone
“They underestimated the strength of the labour market, wages and inflation," said Su-Lin Ong, RBC Capital Markets’ chief economist. “But are they alone? Hasn’t everybody revised up their inflation forecast globally?”The US Federal Reserve and the European Central Bank also long held the view that inflation was temporary before conceding error. Central banks have become warier of making too many predictions about the future.
He appreciates that it was a tumultuous period. “It’s not a job that anyone craves,” he said. “I can’t say the RBA has not done worse than its peers.” In reality, he said, the commitment was only to keep rates low until the economic objectives were fulfilled, which happened sooner than expected. The central bank’s focus is the economy, not bond trader happiness, he added.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Too much COVID stimulus, not enough budget savings: EslakeLeading independent economist Saul Eslake says the RBA erred last year, leaving it catching up to deal with inflation pressures. | By Shane Wright swrighteconomy
Read more »
Too much COVID stimulus, not enough budget savings: EslakeLeading independent economist Saul Eslake says the RBA erred last year, leaving it catching up to deal with inflation pressures. | By Shane Wright swrighteconomy
Read more »
Why the cost of negative gearing tax breaks is likely to riseThe federal budget could miss out on billions in revenue in coming years and economists have called for reforms to bring Australia’s housing tax policy into line with international standards.
Read more »
Why the cost of negative gearing tax breaks is likely to riseThe federal budget could miss out on billions in revenue in coming years and economists have called for reforms to bring Australia’s housing tax policy into line with international standards. realestate propertyprices
Read more »
US inflation eases after 41-year high, US stocks rallyWall Street rallies as cooling inflation eases interest rate hike fears. The Australian dollar surges to 71 US cents as the greenback falls.
Read more »
ASX rises 1.1pc as US inflation fallsAustralian shares traded to a high of 7071 following a rally on Wall Street after inflation surprised on the downside.
Read more »