Imagine our economy is a plane that’s being driven by two co-pilots. Each pilot has their own control panel,but they share similar objectives:to keep the plane flying smoothly.
Continuing high inflation rates and the recent spate of bank collapses could create massive challenges for central bankers and governments.
Central banks were challenged and have been found wanting by the events of the past three years.
The era of near zero interest rates arguably made our current inflation problems worse and left the financial system more vulnerable to bouts of instability.
The RBA governor hit back at criticisms of the board,saying the review panel did not sit in on board meetings.
Reserve Bank governor Philip Lowe’s statements after every board meeting reveal how the central bank’s battle against inflation has altered.
If you think RBA governor Philip Lowe has a tough job,spare a thought for the incoming Bank of Japan governor,who will be walking an economic tightrope as he tries to avoid triggering global turmoil.
High energy and grocery prices will keep the pressure on household budgets,sparking concerns from the Reserve Bank of a potential price-wage spiral.
The Japanese central bank’s “technical” changes to one of its monetary policies has shaken up global bond and currency markets,and might be a preview of what’s in store for investors next year.
Commonwealth Bank also says it believes the Reserve is “a bit of a closed shop” while advocating for board votes on monetary policy to be publicly revealed.
Mervyn King,the former Bank of England chief,said “all central banks in the West” had failed in their duty to control inflation.