CBA economist warns RBA could crash economy with more rate hikes
CBA chief economist Luke Yeaman warns the RBA could trigger recession by raising interest rates further.
Luke Yeaman, CBA's chief economist, says the RBA faces a dangerous choice between fighting inflation and avoiding recession. The official cash rate is already at a 15-year high of 4.6 per cent.
Markets estimate a one-in-five chance of another rise in November. Oil prices remain above $US100 a barrel due to Middle East and Ukraine conflicts, making inflation harder to control.
Yeaman said further rate rises could tip the economy over the edge when households are already under pressure and the housing market is weak. Economic growth has slowed to just 0.4 per cent in the June quarter.
A recession is defined as two consecutive quarters of negative growth. The RBA's own assistant governor acknowledged the delay between rate changes and their real-world effects.
- 4.6 per cent
- Cash rate
- 0.4 per cent
- Growth in June quarter
- One in five
- Chance of November rate rise
- $US100 per barrel
- Oil price floor
Why it mattersEach rate rise affects mortgage repayments, business investment and jobs. A recession means job losses and financial hardship for many Australians.
AustraliaAustralian households are already struggling with higher interest rates and inflation. This warning suggests further rate rises are possible but risky, leaving mortgage holders and renters uncertain about how much longer costs will stay high.
✓ Claims checked against the source. checked 2 h ago
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