Why RBA keeps raising cash rate and how government ‘should’ actHouseholds shouldn’t be forced to cut back on their spending, says a leading economist.3 min read

7NEWS00:00

Mortgage holders are being hit with higher repayments in the fight against inflation, but many of the forces driving prices have little to do with how much households are spending.The Reserve Bank of ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2672273617?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2026-10-01 00:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2672273617","market":"nz","top_or_hot":-1,"title":"Why RBA keeps raising cash rate and how government ‘should’ actHouseholds shouldn’t be forced to cut back on their spending, says a leading economist.3 min read","media":"7NEWS","content":"<div>\n<p>Mortgage holders are being hit with higher repayments in the fight against inflation, but many of the forces driving prices have little to do with how much households are spending.The Reserve Bank of ...</p>\n\n<a href=\"https://7news.com.au/sunrise/economist-calls-on-government-to-boost-productivity-as-mortgage-holders-bear-brunt-of-rbas-cash-rate-rise-c-22951556\">Source Link</a>\n\n</div>\n","source":"7news_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why RBA keeps raising cash rate and how government ‘should’ actHouseholds shouldn’t be forced to cut back on their spending, says a leading economist.3 min read</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy RBA keeps raising cash rate and how government ‘should’ actHouseholds shouldn’t be forced to cut back on their spending, says a leading economist.3 min read\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-10-01 00:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://7news.com.au/sunrise/economist-calls-on-government-to-boost-productivity-as-mortgage-holders-bear-brunt-of-rbas-cash-rate-rise-c-22951556><strong>7NEWS</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Mortgage holders are being hit with higher repayments in the fight against inflation, but many of the forces driving prices have little to do with how much households are spending.The Reserve Bank of ...</p>\n\n<a href=\"https://7news.com.au/sunrise/economist-calls-on-government-to-boost-productivity-as-mortgage-holders-bear-brunt-of-rbas-cash-rate-rise-c-22951556\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"CGDV","symbol_name":"Capital Group Dividend Value ETF","start_time":0,"source_url":"https://7news.com.au/sunrise/economist-calls-on-government-to-boost-productivity-as-mortgage-holders-bear-brunt-of-rbas-cash-rate-rise-c-22951556","article_id":"2672273617","we_media_id":null,"thumbnails":[],"rights":{"source":"7news_stock","url":"https://7news.com.au/sunrise/economist-calls-on-government-to-boost-productivity-as-mortgage-holders-bear-brunt-of-rbas-cash-rate-rise-c-22951556","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2672273617","pubTimestamp":1790784000,"columns":[],"sourceInfo":{"source_id":"7news_stock","name":"7NEWS"},"weMediaInfo":null,"summary":"Mortgage holders are being hit with higher repayments in the fight against inflation, but many of the forces driving prices have little to do with how much households are spending.The Reserve Bank of Australia  delivered its latest blow to mortgage holders on Tuesday, lifting the cash rate by 25 basis points to 4.60 per cent, its highest level in 15 years.WATCH THE VIDEO ABOVE: Government spending blamed for mortgage painKnow the news with the 7NEWS app: Download today ArrowGovernment spending, higher oil prices, and booming investment in areas such as data centres are among the factors contributing to demand and putting pressure on the economy. So what does raising interest rates actually achieve?Why the RBA keeps raising ratesDr Christian Baylis, founder of Fort Lake Asset Management,told Sunrise the real problem is a lack of supply relative to demand. In simple terms, Australians are demanding more goods and services than the economy can produce. The RBA cannot build more roads, inc","collect":0,"end_time":0,"defaultTopTitle":"7news.com.au","property":[],"viewcount":null,"language":"en","relate_stocks":{"CGDV":"Capital Group Dividend Value ETF","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","DFUV":"DIMENSIONAL US MARKETWIDE VALUE ETF","RBA":"里奇兄弟拍卖","BK4137":"综合支持服务","IMCG":"iShares Morningstar Mid-Cap Growth ETF","LU0757428866.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AE\" (USD) ACC","LU1303367103.USD":"摩根大通多经理另类基金 A (acc)","BK4588":"碎股","BK4585":"ETF&股票定投概念","CLIX":"ProShares Long Online/Short Stores ETF","LU1815336091.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AUP\" (USD) INC"},"translate_title":"一位著名经济学家表示，澳大利亚央行为何不断提高现金利率，政府 “应该 ”采取行动，家庭不应被迫削减开支。3分钟阅读","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DFUV":0.86,"CGDV":0.86,"RBA":1,"IMCG":0.65,"CLIX":0.86},"content_text":"Mortgage holders are being hit with higher repayments in the fight against inflation, but many of the forces driving prices have little to do with how much households are spending.The Reserve Bank of Australia (RBA) delivered its latest blow to mortgage holders on Tuesday, lifting the cash rate by 25 basis points to 4.60 per cent, its highest level in 15 years.WATCH THE VIDEO ABOVE: Government spending blamed for mortgage painKnow the news with the 7NEWS app: Download today ArrowGovernment spending, higher oil prices, and booming investment in areas such as data centres are among the factors contributing to demand and putting pressure on the economy. So what does raising interest rates actually achieve?Why the RBA keeps raising ratesDr Christian Baylis, founder of Fort Lake Asset Management, told Sunrise the real problem is a lack of supply relative to demand. In simple terms, Australians are demanding more goods and services than the economy can produce. The RBA cannot build more roads, increase business investment or make companies more productive, but what it can do is make borrowing more expensive, reducing the amount households and businesses spend. \n“The RBA has to effectively try to temper the demand because it can’t do anything about the supply side of the economy,” Baylis said.Be the first to know: Add 7NEWS as your preferred news source on GoogleHigher repayments leave households with less disposable income, which reduces spending across the economy and, in theory, takes pressure off prices.But for households already cutting back to afford their mortgages, another rate rise does not increase the supply of anything or produce more oil, build more infrastructure or make businesses more productive.Baylis argued governments therefore need to do more to address the supply side, rather than leaving the RBA to suppress demand through higher interest rates.What governments can actually changeBaylis said governments should reduce their overall footprint in the economy, arguing they should be running surpluses rather than deficits while inflation remains elevated.“At this stage of the economy, with the sorts of issues that we have as an economy, the government should be running $30 billion surpluses, not $30 billion deficits,” he said.He argued that would take pressure off the economy and give the RBA more room to keep interest rates lower.That could include incentives for businesses to invest in new equipment, reducing red tape, and building infrastructure that makes it easier for people and businesses to work.Interest rates remain one of the RBA’s main tools for controlling demand and inflation but monetary policy can only address one side of the equation.Economist Dr Christian Baylis has called on the government to boost productivity to counter rising inflation. Credit: AAP, SunriseIf Australia’s productive capacity is not keeping pace with demand, reducing spending through higher borrowing costs is one way to restore balance. The alternative is to increase the economy’s capacity to produce by boosting investment and infrastructure. Baylis used the example of a baker who cannot produce enough croissants to meet growing demand.Rather than simply making customers buy fewer croissants, improving the baker’s equipment could allow them to produce more.\nIt is the same principle that applies to the broader economy.“If you can reduce red tape, you can reduce green tape. All of these things allow businesses to produce the goods and services in the economy at a speed that would be consistent with the demand that will ultimately bring inflation down,” Baylis said.“It will help to offset the footprint that the government is having in the economy.”\nKochie unleashes on ‘politicians talking BS’ as Aussies face $5500 hit2 min readFears diesel could hit $4 a litre amid fuel rationing warnings2 min read","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"express","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"isLaohu8Offline":false,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.50.1","shortVersion":"4.50.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2672273617","isCrawlerRequest":true}