The Bank for International Settlements says central banks,including the Reserve Bank of Australia,need to take off their blinkers.
While markets are expecting at least one rate cut before the end of the year,RBA governor Michele Bullock and most of the big four banks disagree.
Even though prices fell in May,overall inflation has lifted to a six-month high of 4 per cent. Mortgage holders face a nervous wait for the Reserve Bank’s next meeting.
The Australian sharemarket pared back its early sharp losses,but mining heavyweights dragged the local bourse into negative territory.
The economy in 2023 survived a surge in people moving from fixed to variable rate mortgages. But there are doubts whether it can do it again in 2024.
The Coalition has accused Jim Chalmers of trying to stack a part of the Reserve Bank that will set official interest rates,putting at risk key RBA reforms.
The rivers of gold from high commodity prices and a strong job market have beefed up the budget. But Jim Chalmers says the rivers are starting to run dry.
The former Reserve Bank governor has joined the chorus of voices warning that interest rates may have to stay higher for longer.
Former treasurer Peter Costello told a Senate inquiry that parliament would surrender its sovereignty if the treasurer lost the power to overrule the bank.
Lenders have started cutting fixed interest rates on home loans,as markets bet the Reserve Bank will reduce official interest rates later this year.
Spending in December has been slashed as cost-of-living pressures and soaring mortgage repayments strike a blow to consumer confidence.