Interest Rates, page-2

well, Philip Lowe, the rba governer of Australia said they wouldn't increase interest rates until 2024 so it makes him look bad if he has to increase them before that which is now looking very likely. Plus, the government pretty much controls everything including the rba and has purposely kept them this low as inflation wasn't a problem previously. If inflation goes to 10% as you say and if the rba refuses to increase interest rate, this will cause more investment, overheat economy, increase money supply and make inflation even worse. The rba are also hoping that by keeping interest rates low, this will lower unemployment putting pressure on employers to increase wages which will ease the affects of inflation. That's why they are trying to hold out for as long as they can. But eventually they will need to increase interest rates or risk causing a recession