The political limits of monetary tightening
The Reserve Bank of Australia surprised by hiking rates last week-- but political pressures at home means its room to hike further is limited. Other major central banks will face similar pressures.
The RBA surprised markets by returning to hikes last week after a pause in April;
It also surprised the Australian public and politicians, who are exhibiting significant rate hike fatigue and blaming Governor Philip Lowe for the country’s ills;
A comprehensive review found the RBA has performed better than other central banks— but is hitting the political…
Keep reading with a 7-day free trial
Subscribe to The Macro Letter to keep reading this post and get 7 days of free access to the full post archives.