Politicisation of the RBA – Outcomes versus “Interference”
Like a chook scratching the ground for a speck of sustenance, my little mate Chris Joye has gone back 18 years, to 1994, to try to support one of his many conspiracy theories – this one, political interference in the workings of there RBA.
Mr Joye cites an example where Prime Minister Paul Keating managed to persuade RBA Governor Bernie Fraser that the rate hike in August of that year should be 75 basis points and not the 100 basis points that the Board was considering.
While Bernie Fraser may have been “disappointed” in the way that Mr Keating was involved in the deliberations of the RBA, it is vitally important to note that two months later that intervention, the RBA hiked rates 100 basis points and two months after that, it hiked interest rates a further 100bps, to an eye-watering 7.5%.
To this day, this remains one of the most concentrated and furious rate hiking cycles in Australia in modern times.
275 basis points of interest rate hikes in just 119 days.