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yourhero111

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07/05/24

09:10

Post #: 73697097
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Originally posted by bas10: ↑

This is what I have been saying —

Why further interest rate hikes by the Reserve Bank won't fix Australia's inflation problem

By chief business correspondent
Ian VerrenderPosted
3h ago

If only there was a diagnosed condition called One Size Fits All (OSFA) syndrome.

The chances are that, if that were the case, a significant portion of our economic gurus might just find themselves exiting their shrink and heading down to the nearest pharmacy for some relief.

In the past few months, many of our soothsayers have mostly all shifted gears on the future direction of interest rates.

What early this year was a near-unanimous call for multiple rate cuts has suddenly been abandoned, replaced instead by predictions of further possible interest rate hikes.

Even those who reckon higher rates are wide of the mark have adopted the "higher for longer" argument.

There's no doubt that inflation, while still reducing, is no longer fading as quickly as it once was and no longer is uniform.

The prices for stuff we buy, such as clothes and household goods, are going backwards. It's not just that price rises are slowing. They're actually getting cheaper.

But the prices for essential services, such as rent, health and education, are soaring. That's helped push one measure of price rises — core inflation — higher on a quarterly measure.

Quick as a flash, that's sparked a renewed demand from some sections of the economics commentariat for further rate hikes to smash the evils of inflation once and for all.

It's there in black and white in all the manuals. If inflation becomes a problem, raise interest rates and keep doing it until inflation is vanquished, regardless of the consequences.

So far, it's worked. We've either put off buying or cut back on a whole raft of things we've deemed aren't essential.

But there are some purchases over which you have no power. And that raises a question: Are our decisions on whether to go to the doctor, put a roof over our head or go to school influenced by interest rates?

If the answer to that is yes, then we'll pay for it down the track.But we have no power to only pay two-thirds of the rent or maybe just go to school for three days this week to save on expenses.

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all these rate hiking is actually making those pensioners and people have a big saving rich not even the landlord as they are will just passing through these cost to the tenant.

They are still going to spend and maybe they will spend more since they have more income thanks for the rate hikes. Fiscal policy/lower immigrate is the only way to lower the inflation.

Last edited by yourhero111: 07/05/24

ZIP Price at posting: $1.31 Sentiment: Hold Disclosure: Held
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