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.
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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.
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.
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.
Some foreign officials promoting central bank digital currencies want to be able to track and limit transactions in real time.
Governor Philip Lowe says it is “not unreasonable” to expect the cash rate to climb to 2.5%. That’s an extra $600 to service a $500,000 mortgage.
Why raise rates now, for the first time in more than a decade? If the Reserve Bank isn’t careful, too many more rate hikes like this might help bring on a recession.
The best way to manage the economy is though an array of tools. Interest rates are just one.
Inflation is well outside the Reserve Bank’s target band and higher than it has been for two decades.
Of the news on prices, wages, interest rates and unemployment, only the unemployment update looks set to be positive for the Coalition.
While everyone’s talking about Anthony Albanese’s campaign stumble, the more extraordinary thing is that unemployment is actually set to fall below 4%. A 60-year low of 3% is now within sight.
Do you have what it takes to be Australia’s number two central banker and heir apparent to the governor? Here are the questions you’ll need to prepare to answer.
Australia’s GDP was up 3.4% last quarter of 2021, on the back of pent-up consumer spending. Other factors must drive future growth.
Unemployment is far lower than predicted and isn’t setting off the kind of inflation seen in the United States. There’s no telling how much lower it can go.
There’s no reason why Australian lenders couldn’t offer 30-year fixed-rate mortgages, as they do in the US. It could save borrowers thousands of dollars in interest a year.
The Morrison government could get unemployment down to levels not seen since the 1970s.
The case for the RBA increasing interest rates certainly exists. But it’s far less pressing than in the United States.
Australia’s Consumer Price Index rose 1.3% in the three months to December, bringing inflation for the 2021 year to 3.5%.
Brainard has been pushing the Fed to consider exposure to climate change in its regulation and analysis of banks. That’s sparked fury from Republican senators – and even a Nobel Prize winner.
Outside of a few superstar firms investing heavily in artificial intelligence, investment by Australian businesses has been shrinking for a decade and isn’t set to bounce back.
Top contributors
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Professor of Economics, UNSW Sydney
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Visiting Fellow, Crawford School of Public Policy, Australian National University
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Professor, Warwick Business School, University of Warwick
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Senior Lecturer, Research School of Economics, and Research Associate, Centre for Applied Macroeconomic Analysis, Australian National University
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Lecturer in Economics, Monash University
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John Hawkins is a Friend of The Conversation.
Senior Lecturer, Canberra School of Politics, Economics and Society, University of Canberra
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Associate Professor, School of Economics, University of Sydney
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Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University
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Vice-Chancellor’s Fellow, University of Tasmania
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Consultant corporate finance and economics, Monash University
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Professor of Institutional Economics, RMIT University
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Professor of Economics and Finance, Tasmanian School of Business and Economics, University of Tasmania
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Economist and Director, Centre for Future Work, Australia Institute; Honorary Professor of Political Economy, University of Sydney
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Professor, Monash University
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Honorary Professor of Economics, UCL
