Reserve Bank sends interest rates sky-high to throttle spending speeds

In May, people in NSW spent a record $1 billion eating out across the state’s restaurants, cafes and takeaways.Canberrans and Northern Territorians also spent record amounts on pad thai, pizza and pilaf. South Australians, Queenslanders and Tasmanians weren’t far off either.For a country with inflation at its highest level since Tom Cruise was starring in, the rush to our favourite restaurants seems strangely at odds with the narrative of economic end days just around the corner.

But at 1.35 per cent, the cash rate is still lower than what it was in 2019 when the bank started cutting rates in a bid to drive down unemployment and lift inflation . But RBA governor Philip Lowe, in his statement explaining Tuesday’s rate rise, made clear that home buyers should expect more pain. What’s not normal is a cash rate of 0.1 per cent or house prices galloping along at more than 20 per cent per annum.The battle, for both the RBA and the new federal government, is how to balance the move back to normal against the situation now facing monetary and fiscal policy.

Source: Loan Digest (loandigest.net)

Gee this guy writes shite articles get rid of im

Sky high lol

root of inflation is western world COVID stimulus, Aust was at front of the pack, that needs to be worked thru first before the cycle really shifts. Too bad for the ones who didn't get their nose in the trough, they are the ones really suffering from inflation.

I’d argue they haven’t gone hard enough. .75 would have been a serious shot across the bow, given ppl pause & the RBA room for flexibility next month. .5 basically locks in another .5 next month & then the RBA will assess again.

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