g'day stayer.... I too am self-taught through wide reading and along discussions with others who know much more.... I've demanded tutoring from my friends hahahe.....
RBA/Treasury have different experience to we poor buggers struggling with micro-economics. Macro is a whole other dynamic. I get the feeling they are using a 20metre pole to try and turn a light switch on. because the fine motor movements (skeletal muscle) are at a a large distance the impact is exaggerated and scattered. and the actual switch very difficult to judge, so lots of stabs with the pole make holes and marks on the wall all around the switch.... but eventually there'll be so much damage to the wall that they'll have to bring in a sparky to repair the switch and she/he can turn the light on hideehideehideyhi hohoho. so will come xmas!
and as I said above, I have confidence in the RBA Board.
what you describe in para 2 is, I think, APRA's job isn't it? the RBA were buying bank bonds through covid to increase cash flow in the economy. late last year they announced they were writing off those bonds to tighten liquidity, before interest rates rose. At around the same time APRA released the requirement of banks to do greater diligence and to raise the interest rate bar for borrowers capacity to pay. but this is my understanding and if I'm wrong I hope you or others will correct me.
I can see the benefits of a "free" market.... I can also see the problems. imo there needs to be a balance between regulation and unrestrained, unregulated business. it's not just banks. imo the right went way too far with de-regulation, the Labs have always had a tendency to go too far the other way. I don't know where the optimal regulation sits on the scale.
but banks determine their own lending practices largely without instruction. APRA can regulate lending terms but are excessively, imo, reluctant to do so.
but you mention international forex and I think this is the primary impetus behind RBA adjustments. the falling dollar makes our imports more expensive and this the worst inflationary pressure. the AUD fell below 65 cents the other day, the RBA needs to get AUD back up to 68c as the "sweet spot" that supports lower cost imports without effecting export profits. so the effect of raising the rate on tues resulted in a 0.8 cent rise.
really I'm only starting to get my head around this, so feel free to correct me.... waddya reckon?
