Via Phil Bayley’s ADCM letter:
Monday’s front page of the AFR led with a call from noted economist and former Reserve Bank board member, Warwick McKibben, for the RBA to start raising the cash rate. McKibbin argued that the central bank should look at other indicators of overall economic activity, rather than just focus on an inflation rate that remains below the RBA’s target band. Failure to do so, risks exacerbating economic imbalances in the form of inflated asset prices and over indebtedness in the private sector, and households in particular.
He is not alone in these views. His comments were reiterated by fellow members of the “shadow” monetary policy board in the AFR the next day, albeit a few pages in from the front. Moreover, the BIS said much the same thing in its inaugural Annual Economic Report, released over the prior weekend.
