Peter Costello says central banks were too slow to raise interest rates - and borrowers would pay the price. RBA
Future Fund chairman Peter Costello has lashed the Reserve Bank for misjudging the economy, saying borrowers are now facing steeper interest rate hikes because of its failure to act earlier on surging inflation.
“It’s our belief that monetary authorities, both in the US and in Australia, were caught napping,” Costello said. “With the surge in inflation.. .now the rate rises are going to have to be much more significant than would have been the case than if they’d begun to act earlier,” “The [Reserve] Bank gave guidance, the guidance turned out to be wrong. The Bank intervened to try and produce the outcome and of course, the money that it used to intervene was wasted,” Costello said.The Future Fund, which invests to help pay the pensions of government employees, has returned 6.1 per cent a year over the past three years. Since its inception in 2006 it has returned 7.8 per cent a year.
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