The RBA is failing its duel mandate of sustaining price stability and full employment. It is delivering neither. Inflation is well below its 2-3% target band with little prospect of it coming out of it sustainably:
Unemployment is rising:
And under-employment is at record highs:
This economy very obviously needs rate cuts.
Of course it can’t have them owing to the RBA obsessing over its third mandate, financial stability, which is being wrecked by the wild specufestor bubble:
Driving house prices mad in the east:
MB warned the RBA about this impasse over and over again when it failed to innovate policy tools after 2011. That it actively resisted macroprudential tools until far too late will go down as one of the great monetary policy blunders of our time.
Now it very obviously needs to cut for the economy and just as obviously can’t for fear of its own bubble.
What can I tell you? When you and APRA belatedly get around to tightening investor lending rules again, do not lower the speed limit ceiling to 7%, cut it to 5% or lower so you drop interest rates again.
Otherwise you will continue to fail the mandate.
