Central bankers need to come clean on how monetary policy works

It’s about time that central bankers stopped being so coy when it comes to discussing the dirty details of monetary policy.

In essence, higher interest rates only work to curb inflation because they inflict enough pain to cause people – both consumers and businesses – to change their spending and investing behaviour. The jobs market is buoyant, which means that few people are struggling to meet their mortgage payments. The problem is that if people postpone making the inevitable adjustments to their spending patterns, central banks are forced to push even harder on the brakes.

yeh like how lowering interest rates enables people to change their behaviour by borrowing stupid amounts of money to pay stupid prices for houses which then prevents the RBAInfo from raising rates to anywhere close to where their 'neutral' interest rate target is.

the RBA needs to come clean on what's going to happen to AUD if we're raising by 25bps while the Fed is set to raise 150 bps by end of year. we're going to be importing inflation in a major way

They keep on saying increased consumer spending is the problem whilst prices for all goods & services are up markedly across the board 🙄💰🙄💰🙄 Buying less but paying sh.. loads more 🤪

I thought this was obvious.

Because most people only bother to adjust their behaviour if it causes them - personally - financial pain. auspol

Smart money is still going to Texas (Tmrc) Undervalued Rare earth mining

How comes it’s the people that need change their ways but NEVER the banks?

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