Why RBA is to blame for inflation problem

News.com.au - 13/12
The Reserve Bank failed to act quickly enough when Australia’s inflation rate spiked at the end of the pandemic, which is a mistake mortgage holders are still paying for two years later.

The Reserve Bank failed to act quickly enough when Australia’s inflation rate spiked at the end of the pandemic, which is a mistake mortgage holders are still paying for two years later.

According to the KPMG Inflation Pressure Gauge, a slow-moving RBA, led by then governor Philip Lowe, failed to remove excess demand from the system.

According to the research, Aussies demand skyrocketed post-Covid due to big spending packages by the then Coalition government under Scott Morrison, including JobKeeper and Home Builder.

Typically, when inflation is driven by excess demand, central banks can raise interest rates to reduce consumer spending, business investment and borrowing, which in theory should cool the economy and bring inflation back within the RBA’s targ...
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