{"id":619649,"date":"2026-09-09T20:28:17","date_gmt":"2026-09-09T20:28:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/619649\/"},"modified":"2026-09-09T20:28:17","modified_gmt":"2026-09-09T20:28:17","slug":"the-rba-hoped-this-years-three-interest-rate-rises-would-tame-inflation-but-nothing-is-going-their-way-australian-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/619649\/","title":{"rendered":"The RBA hoped this year\u2019s three interest rate rises would tame inflation \u2013 but nothing is going their way | Australian economy"},"content":{"rendered":"

For five years the Reserve Bank has been trying to wrangle inflation back to its 2.5% target, and for years it has essentially failed.<\/p>\n

The result is a cost-of-living crisis<\/a> that has generated intense community grievance.<\/p>\n

The RBA\u2019s deputy governor, Andrew Hauser, acknowledged as much on the ABC\u2019s 7:30 report on Tuesday.<\/p>\n

\u201cPeople are furious about inflation,\u201d Hauser said.<\/p>\n

\u201cInflation has been above target for a long period of time and, at some point, we will have to say, \u2018That is long enough\u2019.\u201d<\/p>\n

Inflation graph<\/a><\/p>\n

Are we at that point? Not yet, said Hauser, even as he hinted we are getting closer every day.<\/p>\n

The RBA\u2019s nine-member board had hoped this year\u2019s three interest rate hikes would be enough to bend the arc of inflation slowly back to reach 2.5% by the end of next year.<\/p>\n

But nothing is going their way.<\/p>\n

The latest blow is the complete breakdown of the US-Iran ceasefire, with escalating tit-for-tat strikes on oil tankers and infrastructure in and around the strait of Hormuz.<\/p>\n

The global oil benchmark has risen above $US100 a barrel<\/a> for the first time since July. Fuel prices are tracking higher once again, with unleaded approaching $2.10 a litre and diesel passing $2.50.<\/p>\n

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Then there is this year\u2019s sudden explosion in datacentre investment<\/a>. That has heaped pressure on a construction sector already struggling to get the materials and labour it needs to build the massive pipeline of work to build homes, roads and rails.<\/p>\n

Households are complaining a lot and feeling depressed, but there\u2019s still a surprising lot of spending happening, which is keeping consumption growth ticking along.<\/p>\n

Meanwhile, Australia\u2019s productivity performance \u2013 the thing that could make it easier for the economy to grow without pushing inflation up \u2013 remains flat.<\/p>\n

Investors and an increasing number of economists believe we are approaching that point when the RBA has to say \u201cenough is enough\u201d and act more aggressively to get price rises back under control.<\/p>\n

Financial markets are pricing in more than a 70% chance of another rate hike on 29 September, and even the chance of a second by the end of the year.<\/p>\n

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\u201cOf course we could raise interest rates sharply,\u201d Hauser said.<\/p>\n

\u201cWe could do it tomorrow. We could no longer take seriously the full employment part of our objective [and say] we\u2019re gonna bring inflation down come hell or high water.\u201d<\/p>\n

Here Hauser is pointing out that the RBA has not been asleep at the wheel, but has been making a conscious calculation.<\/p>\n

Since mid-2021, annual inflation has only been below 3% for one year.<\/p>\n

On the other hand, unemployment has been below 5% for almost all of that time \u2013 a labour market record unmatched in modern Australia history.<\/p>\n

\u201cThe reason as a board we have decided to take it slowly is to preserve as many jobs in this country as we could,\u201d Hauser said, and not for the first time.<\/p>\n

But the balance is starting to shift.<\/p>\n

\u201cWe have one big problem, and that\u2019s inflation,\u201d he said.<\/p>\n

\u201cInflation is too high, that\u2019s why we raised interest rates three times at the beginning of this year. The question now, frankly, for us, is have we done enough, or is more needed?\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"For five years the Reserve Bank has been trying to wrangle inflation back to its 2.5% target, and…\n","protected":false},"author":2,"featured_media":619650,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-619649","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/619649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=619649"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/619649\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/619650"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=619649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=619649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=619649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}