The Fed is in a tricky position as it signals it may soon cut interest rates to boost the economy, which also risks spurring runaway inflation and even an economic downturn.
It it wasn’t for a surge in government spending economic growth would be extraordinarily weak. As it is, it’s the weakest since the global financial crisis.
Inflation has barely been within the Governor Philip Lowe’s target band his entire time in office. Zero inflation means he should cut now, before the election.
Granting low-wage workers a “living wage” instead of a minimum wage is far from costless, and there are much better ways of helping people genuinely in need.
Hardly anyone believes that prices are really increasing by only 1.9% per year. The fault lies with us, and also the way the Bureau of Statistics adjusts prices for ‘quality’.
Property prices have soared in the past decade, but much more modest increases in rent, with the exception of Sydney, suggest less of an imbalance of supply and demand for housing as a place to live.
As with economic growth and wages, the RBA’s response seems to involve crossing as many fingers and toes as possible and publicly proclaiming that things are looking good.
Personal income taxpayers are shouldering more of the burden, while less revenue is coming from taxes on companies, capital and consumption. Only major reforms will change these sustained trends.
Business leaders some sectors are feeling less positive about the year ahead because consumers are spending less, according to our analysis of the outlook of leaders of Australia’s ASX 200 companies.
While many market observers blame growing concerns about inflation for the stock market crash, the real culprit may be fears that the economy is about to slow.