Contrary to earlier assurances that interest rates would remain low until 2024, the Reserve Bank of Australia’s aggressive policy – being pursued by central banks globally – follows failures to forecast rising prices and may not be effective in achieving its objective.
Instead, the reserve bank’s actions may result in a combination of economic instability, inflation and rising rates – coinciding with great power competition and a difficult energy transition – which will exacerbate inequality, dilute living standards and frustrate ordinary people’s expectations.
