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Flat White

The Reserve Bank’s great gamble on interest rates

19 October 2020

4:33 PM

19 October 2020

4:33 PM

The fiscal path outlined in the federal budget will constrain monetary policy and undermine the stability of the Australian economy. The Reserve Bank of Australia will be forced to pursue expansionary monetary policy that will leave it impotent in the event of future economic headwinds.  

The RBA’s decade-long experiment with record low interest rates has created an economy that is dependent on low borrowing costs and has emboldened the Federal government to dramatically blow the government debt out to $1.7

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