There is a kind of sickness in Australia’s coverage and discussion about the economy – an obsession that interest rates need to do something. Go up, go down – anything! Unemployment fell, interest rates must do something (apparently fewer people being out of a job is bad and needs to be cured). Oh no, inflation went up in one month – we need interest rates to do something!!
We see this as well with investors – or let’s be honest, speculators – who are determined that interest rates will go up next week.
