The price we'll pay for the RBA’s low-rate policy

The Reserve Bank slashed interest rates while the economy was strong. Now we are left with an out-of-whack property market and rising inflation that may not be so easy to reverse.

Treasury Secretary Martin Parkinson’s warning on low rates comes too late. He and the rest of the RBA board should have been thinking about these things over the last few years -- not blindly slashing rates in some vain attempt to weaken the Australian dollar. What are we left with? A house price boom which the Treasury Secretary himself now acknowledges may threaten financial stability; and an emerging inflation problem. Warning now about the dangers of low rates is an absurdity -- the damage is done and there is little he or the RBA board can do about it.

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