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Breaking: Major banks respond following RBA decision to cut interest rates (www.abc.net.au)

submitted 2 weeks ago by [email protected] to c/[email protected]

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[–] [email protected] 1 points 2 weeks ago (1 children)

There’s no link between the rates and inflation

So why did they jack up the rates quickly and massively to literally try and curb inflation? lol You have no idea whta you're talking about. Inflation is caused by people having and spending more money. Lowering interest rates means lower repayments which means more money in peoples hands for them to spend, pushing inflation up. Higher interest rates mean the opposite, which pushes downward pressure on inflation.

[–] [email protected] 1 points 2 weeks ago (1 children)

They did it because everyone else did the same and they wanted to look like they were doing something. Jacking up rates only works when the thing going up is discretionary spending instead of essentials.

[–] [email protected] 1 points 2 weeks ago* (last edited 2 weeks ago) (1 children)

Jacking up rates only works when the thing going up is discretionary spending instead of essentials.

Which it was.

[–] [email protected] 1 points 2 weeks ago (1 children)

The things going up were food, energy and housing. Those are all inelastic goods.

[–] [email protected] 1 points 2 weeks ago

Definitely not the only things that were going up.