7am “A real smack in the face”: Did the RBA get it wrong?
Mar 17, 2026
Greg Jericho, Chief Economist at The Australia Institute, critiques the RBA's recent rate rise and its reasoning. He questions the inflation drivers the bank cited and explains why monetary policy was used. He outlines the immediate pain for mortgages and household budgets, discusses who benefits from input-cost spikes, and considers the likelihood of further rate increases.
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RBA Misreads Inflation Signals
- Greg Jericho argues the RBA misread current inflation as accelerating when consumption and wage indicators show stability.
- He points to below-expectation household spending, steady wage growth, and falling unit labour costs as evidence against excess demand.
Supply Shock From Oil Is Not Solved By Rate Hikes
- Jericho says rising petrol from the Iran war is a supply shock the RBA cannot fix with interest rates.
- Raising rates simply doubles pain for households paying more for unavoidable fuel costs.
RBA Responds With Its Only Tool And Past Regret
- He suggests the RBA is using rates because it's their only tool and reacting to past criticism about being too slow in 2022.
- That creates pressure to act even amid uncertainty like the Iran war and volatile petrol prices.