Searching For the String by John A. Keel

Continued rate increases offshore seemed to startle our monetary mandarins.īut within a month, all that changed. Last December, just before the Christmas break, we were left with that impression that while further rate hikes were on the way, much of the heavy lifting had been done.Ĭome the first meeting in February, however, there was a slightly panicked tone to the statement accompanying the rate-hike decision. And it has repeatedly drummed into the national psyche that it will continue to raise interest rates until its job is done.īut it's the subtle changes in messaging that have meandered confusingly about how close to the target we may be and how much further there is to go.

True, it has consistently said it is resolute in its determination to stamp out inflation. When talk comes at a costĬheap jokes aside, the messaging from the Reserve Bank in the past few months has left much to be desired. Which begs the question: Are we sailing, flying or walking? Ask any sailor and they'll quickly explain the dangers of landing a keel under any circumstances, let alone on a narrow pathway. The economy, we're told, is 'on an even keel', we're hopeful we can engineer 'a soft landing' although the 'pathway remains a narrow one'. But for months now, the continued message from Martin Place has incorporated a mangled series of mixed metaphors supposedly designed to calm a nation bewildered and frightened by the abrupt upheaval in its financial fortunes. Poor communication and what many see as broken promises on interest rates have driven the incredible community backlash against our central bank.Ĭhastened it may be.

Only a handful were holdouts, predicting a return to rate rises.īut the majority called it incorrectly, and most now are pointing the finger at the Reserve Bank, angry about what they argue was a sudden about-face. The bulk of the nation's top economists were in firm agreement. Late on Monday, on the first anniversary eve of our latest rate-hiking cycle, money markets were almost unanimous: The Reserve Bank of Australia, they concluded, was likely to keep interest rates on hold at 3.6 per cent for the second successive month, delivering much-needed respite to cash-strapped home owners.

Searching For the String by John A. Keel