Yay, we're back on track (again)!
As night follows day, interest rates went up and now they are coming down
The release of yet another Monetary Policy Statement, this time includes an announcement of a reduction in interest rates.
Yes, a relief for many, but the focus on the short-term cycle remains.
Equally frustratingly, the policy prescription being followed (ie. monetary policy controlling inflation and fiscal policy reducing the size of government) is one we’ve implemented several many times before. Each time it hasn’t worked, and has left the nation in a worse position.
But this time, we are promised, it will be different. Sigh.
I had the pleasure of talking to Bernard Hickey to place the announcements and forecasts in the context of an economy struggling to grasp the need to change.