On Deloitte Access Economics’ forecasts, underlying inflation in Australia will have been above the 2.5 per cent target for a full seven years by the time it is finally tamed in late 2028. It is therefore little wonder that Reserve Bank governor Michele Bullock is increasingly being questioned about the efficacy of the blunt monetary policy tool at her disposal.
The press conference following September’s rate rise was a case in point. The governor was asked whether monetary policy was becoming detached from the problems it was being used to solve. She responded by noting that mortgage holders are not the only people affected by rate rises as “the interest rate increase gets into all sorts of cracks”.
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