The economy has been hit hard by the RBA's action of raising interest rates.
We still have no idea of what they are doing. Do they believe they have to raise interest rates further and put Australia into recession to reduce inflation? Just when did inflation which was a supply side shock, not unlike the 1970s oil s pice shock, turn into inflation bey excess demand?
Why is it all the market type factors have been falling but not so much the non-market factors.
Just where in the hell is the economy hot so to speak?
The RBA has been all over the place in attempting to explain its position. I di not think michelle Bullock should have been Governor. Lowe did not make his mistakes on his own and Bullock seems not to understand what occurred in the recession we had to have which was a direct result of RBA policy.
I do have sympathy for Chalmers. The previous government made no attempt at all at fiscal consolidation even when it was apparent the economy was in a rude stake. As I have argued previously it is very hard to attempt this once the RBA has raised rates and are still doing it. He has done some but is understandably wary of doing too much in case it creates a recession.
Raising rates has caused the economy to slow dramatically. The RBA now should know if they have done all the rate rises they need to or not. I think they have.
For all the speeches , press conferences etc their communication has been pretty poor.
No comments:
Post a Comment