Also, inflation is now at 5%
anything above 3% and interest rates trend up.. like the past 2 years.. cash rate is almost the same as inflation.. if interest rates go down more than cash starts to devalue.
if the economy booms again, so will inflation.. the reason the RBA is lowering interest rates is to try and put more money in peoples pockets so they spend on retail to get the economy going.
if the economy is going again, RBA wont keep cutting back on interest rates then will they?
at the moment the RBA fears depresion, more than inflation.
its not a normal economay we are in, the rules have all changed for why they do things now.
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