Why the RBA does not need to hike rates (and probably won’t)

Monday 31 January 2022

I have lost count of how many silly articles I have read in the last few weeks about the need for imminent and aggressive RBA tightening. Led by chief parrot Terry McCrann, the Aussie macro pet shop has been in an uproar with poo and feathers flying:

At its first meeting for the year next Tuesday the Reserve Bank will – no ifs, no buts, no Fed-style trimming – end its money-printing QE program.

It will also leave its official interest rate unchanged at the all-but zero, leaving basic home loan rates undisturbed, for the moment, around 2 per cent.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.