RBA’s threat of a rate rise rings a bit hollow
The Reserve Bank of Australia (RBA) is using 'jawboning' to threaten interest rate hikes, despite internal forecasts suggesting inflation and wage growth are softening. The article argues that the bank's rhetoric may be disconnected from its own economic analysis.
Why it matters
Understanding the gap between central bank rhetoric and economic reality is crucial for investors and consumers managing debt and financial planning.
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Share A A A The Reserve Bank is making a lot of noise that it could lift interest rates.
But the RBA’s own forecasts and analysis suggest that barring another unexpected inflation spike – the world’s looking at you, Donald Trump – it is going to struggle to follow through with that threat.
RBA governor Michele Bullock on Tuesday. Brent Lewin While governor Michele Bullock often says the Reserve only has one lever to deal with inflation, she actually has another. And she deploys it every time she stands up to do a press conference or make public statements.
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