Columnist defends $1m a year Reserve Bank boss by arguing he deserves ‘bouquets of flowers’ for saving Australia from an inflation crisis, and many Australians are furious: ‘You got it wrong, Jessica’
- Economics writer Jessica Irvine says RBA boss has ‘saved’ the economy
- Irvine Says Phillip Lowe Deserves Bouquets Despite His Wrong Fee Forecast
- She argues that the comments were necessary at the time and that the media simplified them.
- Critics reacted furiously saying Lowe was wrong and demanding that he resign.
A leading financial reporter has been torn apart by angry mortgage holders for defending Reserve Bank of Australia chief Phillip Lowe despite years of failed economic forecasting that has sent inflation skyrocketing.
The central bank on Tuesday raised the cash rate to 3.1 percent, the 0.25 increase making it the eighth consecutive monthly increase.
Pressure has mounted on Dr. Lowe, with many calling on him to resign over comments last year that suggested interest rates would stay at 0.1 percent until 2024.
But columnist Jessica Irvine strangely jumped to the defense of Dr. Lowe, who is paid $1 million a year to run the nation’s economy.
“Our economy was not burned to the ground, thanks in no small part to the extraordinary efforts of the RBA,” he wrote in the Sydney Morning Herald. “We approach Christmas with an economy at full employment for the first time in half a century.
‘Sure, paying off a mortgage with interest rates 3 percentage points higher than you expected is tough. But it’s even harder if you don’t have a job. And Lowe sure deserves a bunch of flowers, or two, for that.
Ninefax economic commentator has defended RBA chief Phillip Lowe under fire for his interest rate stability forecasts.
The Reserve Bank has raised interest rates for a record eighth consecutive month to the highest level in a decade.
Her ‘puff piece’ comments sparked outrage with borrowers who accused her of tying up to ‘defend the indefensible’.
Among the chorus of disapproval was former Labor senator Doug Cameron who did not hold back.
‘The guy is in a position of great responsibility and he was terribly wrong. Many people were negatively affected. He needs to be called and there must be consequences. Lowe should resign.
Another former Labor senator and Australian Democrat, Cheryl Kernot, also weighed in.
“He was wrong and affected many lives, Jessica,” Ms Kernot wrote.
Not above criticism. And we don’t thank doctors like Coatesworth who got it wrong too.
Dr. Lowe has come under increasing criticism for his statements that seemed to promise that interest rates would stay low until 2024.
In February 2021, Dr Lowe claimed that interest rates would not rise for several years, despite economists in Australia and around the world suggesting that inflation would rise immediately after the pandemic after a large amount of government subsidies to cushion the financial effects of the Covid lockdowns.
“The Board will not increase the cash rate until real inflation is sustainably within the 2 to 3 percent target range,” it said.
“The Board does not expect these conditions to be met until 2024 at the earliest.”
His comments have not aged well given that inflation now stands at 6.9 cents and is poised to top 8.0 percent for the year.
‘We pay Lowe over $1 million a year to get it right!’ noted one angry Twitter user.
Her ‘puff piece’ comments sparked outrage with borrowers who accused her of tying up to ‘defend the indefensible’
Another wrote: ‘People invested their life savings in property based on your predictions… bought property above their comfort zones but now it’s out of reach! They may never be able to retire comfortably…’
Saturday Paper journalist Rick Morton quipped: “It takes a bit of effort, if nothing else, to make absolutely everyone unhappy from every corner of the public debate.” RBA Governor Philip Lowe has done just that.
Dr. Lowe was forced to apologize in November to those who got heavily into debt following his financial forecasts.
“At the time, we thought it was the right thing to do. And I think looking back I would have chosen a different language,” she said.
‘People did not listen to the warnings in what we said. We didn’t understand the warnings clearly enough, and the community listened to 2024. They didn’t listen to conditionality.
“That’s a failure on our part, we didn’t communicate the warnings clearly enough, and we’ve certainly learned from that.”
What a 0.25 percentage point rate hike will mean for borrowers
$500,000: Up to $76 to $2,697 from $2,621
$600,000: Up to $91 to $3,236 from $3,145
$700,000: Up to $106 to $3,775 from $3,669
$800,000: Up to $122 to $4,315 from $4,193
$900,000: Up to $137 to $4,854 from $4,717
$1,000,000: Up to $152 to $5,393 from $5,241
Monthly mortgage payment increases are based on a Commonwealth Bank variable rate that increases by 0.25 percentage points to 5.04% from 4.79% to reflect the Commonwealth Bank cash rate increase. Australia Reserve at 3.1% from 2.85% in December 2022