The Reserve Bank’s behaviour last week can only be described as bizarre. It’s a sign that it’s lost its bearings and isn’t sure what’s happening in the economy or where it’s headed. What has caused its befuddlement? Our unexpected return to near full employment.
Not for everyone. Eg, self funded retirees might prefer higher interest rates as they hold a higher portion of their wealth in cash and interest bearing securities etc. Lower interest rates reduce their income and so, quality of life.
Oh, and banks and their shareholders would definitely prefer higher interest rates too.