Peter Martin, Crawford School of Public Policy, Australian National University
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 consumer price index, which measures everything from the price of peanut butter to gasoline, jumped at an annualized pace of 8.5% in March 2022 as inflation continued to accelerate.
Until recently the Federal Reserve had been purchasing roughly $120 billion of assets every month to support the US economy. The Fed began scaling back those purchases in November and doubled the pace on Dec. 15.
True wages growth, and true price growth, is probably less than the official figures suggest – meaning there’s no need for alarm about inflation in Australia.
Peter Martin, Crawford School of Public Policy, Australian National University
The 55 leading economists surveyed by the Economic Society see few signs of Australia aping the US, where inflation has surged to its highest level in 30 years.
The Federal Reserve decided to slow its pace of bond-buying, potentially the beginning of the end of a program that’s been supporting the economy since March 2020.
Much of the jump in inflation from 1.1% to 3.8% is transient, and the lockdown in NSW will suppress what’s left. But even if you still fear inflation, there are things you can do.
The average price of US goods and services surged in April, leading some to worry the economy is beginning to experience dangerously high levels of inflation. A scholar explains why that’s unlikely.
To understand an economic reality where growth is increasingly more qualitative than quantitative and where environmental constraints need a careful understanding, economics needs a major overhaul.