Jeremy Lawson, chief economist for fund manager abrdn and a former RBA senior economist, said the “credibility of the RBA has been damaged”.
The Reserve Bank damaged its credibility by miscalculating the inflationary effects of the pandemic, acting too slowly to tame rising prices and poorly communicating its intentions to the market, according to a former RBA senior economist.
Among the RBA’s biggest mistakes has been its communications, according to Mr Lawson, who is the latest in a line of economists to criticise the bank for claiming that“They were obviously trying to underpin confidence that rates would remain low for an extended period of time, especially early in the pandemic, but it came across as a promise,” he said. “That communication was too strong in an uncertain environment.
“It’s one thing for markets to be thrown around by these things, but individuals, they make day-to-day decisions based on things that they might get in a headline,” he said.Mr Lawson’s comments come weeks after RBA Governor Philip Lowe admitted the
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