The latest inflation figures confirm that the Reserve Bank wrongly kept interest rates steady at its meeting earlier this month as the official measure of inflation fell to 2.1%, while the monthly indicator dropped outside the RBA target band at 1.9%.
The one thing you won’t hear from the Reserve Bank after the release of the June quarter inflation figures is an apology. Because, to give credit to the RBA, in its May statement on monetary policy it predicted inflation of 2.1%. That it did predict this inflation and yet still kept interest rates steady tells you something about how punishingly timid it has been.
