Robert WatkinsLast year's war? More like last century's war on inflation.
Interest rate hikes can not address inflation caused by supply-side disruption.
Lats (314 ppm)@twasink it’s surprising that these smart people can’t see that. If their pay was linked to long and short term economic performance…..
@Lats Oh, they know it.
But they are more afraid of being seen as impotent than incompetent.
There's also a belief (probably true) that interest rates are still generally too low – a legacy of the GFC that we didn't even start to recover from until COVID hit and the government jump-started the economy again. They'd like to get the cash rate back up into the 5s, because it gives them more room to go down again when that's needed. So they've got a built-in bias for moving upwards.
What they're probably expecting is that the government will jump in with more targeted measures.
@twasink as they say, interest rates are but one tool, however the others - government spending and tax reform - are usually a last resort. All that populist business about tax cuts started by Howard and perpetuated by both the LNP and Labor have not helped.