Former RBA governor Bernie Fraser says the 2024 rate guidance has damaged the bank’s credibility; Philip Lowe to face Senate estimates grilling. Follow updates here.
RBA governor Philip Lowe’s forward guidance that interest rates were not likely to rise before 2024 was a miscalculation and misjudgement, said former RBA governor Bernie Fraser.
“Because the market has sort of jumped on and interpreted this as a likelihood or a near certainty, in market terms, of another three or four increases of interest rates. And that’s unhelpful and doesn’t provide the kind of confidence that the bank should be striving to with the community.” “That is a worry because the independence of the central bank and the credibility of the central bank is absolutely essential. And you can’t have one without the other: independence and credibility go together.”
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