The Reserve Bank did what most hoped it wouldn’t do: raise interest rates while trotting out more of its “uncertainty” mantra. What’s the scam?
The scam is that yet again, the RBA is saying the labour market is “a little tight” without being, er, certain it is too tight.
The RBA monetary policy board announcement and the bank’s quarterly statement on monetary policy were both a bit all over the place on exactly where the inflation pressure is, acknowledging that some is temporary, but, heck, there’s just too much “growth in private demand”, that is, people spending money. So stop.
The policy pain for the government behind the rate rise, though, remains the government’s key policy pain: housing.
Taking out the crazy cost of international travel, it’s the rising costs of building and renting housing that seem to be the persistent inflationary pressure, the nut the RBA can’t crack.
RBA rates rise not the sure thing that the commentariat cries
Claiming that freezing immigration will solve the problem is working well for One Nation, and where Hanson goes, whatever is left of the parties-formerly-known-as-the-coalition will follow.
It would be a brave soul to bet Labor won’t also at least talk the talk.