There is always a blame game when it comes to interest rates, and now to RBA is pointing the finger …
I’ve been saying for a while that Australians don’t deserve another interest rate hike to fight inflation because we are doing the right thing by reigning in inflation.
Cost increases are mostly coming from big business lifting prices higher than CPI, cost increases that are beyond our control from global events, and big spending governments pushing up construction costs and soaking up jobs.
It’s not OUR fault
Politicians all want to be the good cop by spending up big and leaving the RBA to be the bad cop doing the dirty work of fighting inflation.
You’ve been able to sense RBA Governor Michele Bullock’s frustration at this for a while now. But this week she came out with it and openly blamed state and federal governments for fuelling inflation which was putting pressure on the RBA to raise rates again.
So if there is another rate rise, politicians are solely to blame. Good on her for calling them out. The RBA just has interest rates to fight inflation, while governments have a range of measures to help – but they don’t.
Inflation too high
Remember that debate after the May Federal Budget on whether it was inflationary or not? I think Michele Bullock has answered the debate with a resounding… Yes, it is.
While everyone expected the RBA to keep rates on hold this week at 4.35 per cent for the sixth consecutive meeting, according to Michele Bullock, they did discuss a rate hike.
In a statement, the Board highlighted:
“Data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.”
They also indicated there would be no rate cut this year and we’d have to wait well into next year:
“Inflation in underlying terms remains too high, and the latest projections show that it will be some time yet before inflation is sustainably in the target range.”
So the Reserve Bank is not going to save borrowers by cutting interest rates anytime soon.
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