Why would the RBA cut interest rates if inflation and unemployment are fine? No one promised it'll go back to like 1%.
this post was submitted on 23 Feb 2025
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Because the interest rate has a direct impact on quality of life. Everything else being equal a lower interest rate is better.
Everything else is rarely equal though. As can be evidenced by decades of >5% rates.
Currently interest rates affect QOL so much because everyone is mortgaged up to their eyeballs. That isn't normal but unfortunately the policies that have promoted that are beyond the RBAs scope.
So yes , lower interest rates help QOL but they also promote inflation and that's a much harder beast to reign in once it gets up and rolling - for example, we're never going to get back the cumulative 25% increase in the cost of living we've been hit with in the last 4 years or so.
And calling the RBAs response "bizarre" - when we are in a period where caution might be a good idea due to contradictory economic indicators - just seems a bit hyperbolic.