The Reserve Bank of Australia provides forward guidance for the economy. One of the key levers of fiscal policy is interest rate projections. RBA boss Philip Lowe predicted he couldn’t see interest rates rising before 2024 – and many Australians took out mortgages based on that advice. Well we now know he was wrong.
John Kehoe, the economic editor at the Australian Financial Review, joins us to explain how and why Philip Lowe got it so wrong....and what the consequences will be in the housing market and the broader economy.
Philip Lowe conceded his comments were “embarrassing”. Given so many Australians have massive mortgages, should he face consequences for his comments? And what authority will his predictions have in the future.
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