The federal government is attempting to spruik its economic management just as the Reserve Bank is digging its heels in over inflation. With an election months away, it doesn't bode well for Labor.
And if there's a lesson from Donald Trump's victory last month in the US, it is that the voting public appears more willing to mete out revenge than listen to political rhetoric or even economic reality.It was all down to Joe Biden, he claimed. It wasn't, but that didn't matter to voters. And nor did all the glowing statistics about low unemployment, solid economic growth, decelerating inflation and even some serious interest rate cuts.
But there's no escaping the severe financial stress a huge number of Australian households are experiencing. The tide may have begun to turn, with real wages now on the rise, but that could take years to provide meaningful financial relief.The one thing that could tip the scales is an interest rate cut or two.
In most other countries, and particularly America, home owners have their mortgages set for the life of the loan. So, interest rate rises only affect those about to borrow. They don't affect the vast number of households who already have a mortgage. The RBA, however, is ignoring the headline and concentrating on what's known as the "trimmed mean" which in October blew out to 3.5 per cent.
All the signals emanating from the bank's Martin Place headquarters in recent weeks have been for an extended period of rates on hold with an outside possibility of a hike.
Michele Bullock Rba Reserve Bank Reserve Bank Of Australia Central Bank Interest Rates Inflation Cost Of Living Disposable Income
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