Peter Martin, Crawford School of Public Policy, Australian National University
The Conversation’s 29-member panel expects very weak economic growth and recessions in much of the rest of the world, but there’s good news down the track for Australians’ buying power.
Peter Martin, Crawford School of Public Policy, Australian National University
The full effects of the eight consecutive increases in the Reserve Bank’s cash rate are yet to become apparent, and there are signs inflation is on the way down.
Peter Martin, Crawford School of Public Policy, Australian National University
Lowe and the Reserve Bank are pushing up interest rates at almost the fastest pace on record to get the economy back in balance. It’s tough. But it has been done before – and here’s how it worked.
How could a central bank even make a loss, when its job is printing money? The answer is that during the COVID crisis it turned traditional investment advice on its head – and here’s why.
Michelle discusses Tuesday’s RBA rate rise – the fifth increase in a row – as well as the imminent passage of Labor’s climate legislation, and industrial relations negotiations coming out of last week’s summit.
Inflation has hit 6.1%, and the rate of inflation on necessities is 7.6%. Bringing it down will require still higher interest rates and exquisite judgement in order to avoid a recession.
Peter Martin, Crawford School of Public Policy, Australian National University
The panel believes Australia will avoid a recession the year ahead, but is much less certain about the United States. It expects real wages to go backwards and economic growth to sink.
Looking back at the Reserve Bank’s performance in setting interest rates over the past generation, we’d grade it an A for earlier years – but a fail for the years just before the pandemic. Here’s why.
Critics ought to acknowledge that on average over time Australia’s Reserve Bank has met its inflation target, but it is worthwhile examining the way it is run.
The extraordinary increase in house prices and debt means mortgage rates of 7% would be as painful to borrowers today as rates of 17% were decades ago.
Peter Martin, Crawford School of Public Policy, Australian National University
If financial markets are to be believed, you’ll be paying $1,000 a month more on a $500,000 mortgage by the end of next year. But I don’t think interest rates will go that high – here’s why.
For the past 30 years or so, the RBA has targeted an inflation rate of 2-3%. But the rationale for a rate that low was always weak, and has since broken down.
The independent review of the Reserve Bank should be headed by someone from outside the country say 12 leading economists in an open letter to the treasurer.
The share of the population in work has hit an all-time high as the share of the workforce underemployed has hit a 14-year low. The fresh low in unemployment will bring higher interest rates, and perhaps higher wages.