OPINION: But politicians should also have been learning lessons from this week’s grilling of the RBA governor.
In a fateful error, the Reserve Bank promised in early 2021 that the official cash rate would likely stay nailed to the floor until at least 2024, not be ratcheted up nine times in a row in 2022 and 2023, with more to come.
So, a wide range of characters could be lined up today to receive the discontent of rising inflation and higher interest rates.in Canberra this week that he now fears doing too little on interest rates.The real-world choice, he said, was to take the hit now of rate increases to slow the economy with some inevitable losers, or live for years with the corroding effects of inflation which gets even more painful to eradicate the longer it becomes embedded.
Few people imagined in the darkness of 2020 or 2021 that the problem would be a lack of workers rather than a 15 per cent jobless rate. That’s a better result, but it does have consequences.With the best of intentions, Dr Lowe wanted to lock in an era of low unemployment. But he wasEven with unemployment rising slightly to 3.7 per cent, it’s still close to a 50-year low.
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