The government is at the mercy of the Reserve Bank. But the central bank is also subject to forces beyond its control.
gave a speech in Sydney on “climate change and the economy” in which he canvassed the impact of climate change on the way monetary policy works.
Polling by SEC Newgate a week before the numbers were released showed 46 per cent of Australians thought the RBA would raise rates at its August meeting and 40 per cent thought rates would stay unchanged.And then the numbers weren’t as bad as expected.in an imminent increase in the official cash rate
That’s because credibility is such an important lever for any central bank and, tied to a 2-3 percentage point inflation target which it hasn’t met since December 2021, it would require quite a bit of explaining about why the bank wasn’t acting against an accelerating inflation rate. Insurance premiums are perhaps the most glaring example of the impacts of climate change. We have seen huge structural shifts in the insurance market in the way of the rising wave of floods, fires and droughts.
The enthusiasm of the financial markets to reverse their predictions to a rate cut as early as November, however, may be a little excessive.
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