What happens if interest rates don't go up soon? The genie could come out of the bottle

Demand-pull inflation is generated by workers with higher pay having the confidence to spend up big at the shops.

The increase in consumer demand in the economy doesn't stem from confident workers spending their extra cash from a pay rise.The RBA senses the need to raise interest rates because inflation is showing signs of getting hot, but at the same time it's not seen as the kind of inflation that's likely to hang around or become more intense.

Of course, higher interest rates won't necessarily aid this situation. It may actually make it worse. Economists describe this sense of uncontrolled rising inflation as the inflation "genie" escaping from the bottle.

Well done ABC on this

Interest rates don't go up soon? Current Australian inflation is being driven by price hikes, rather than purchasers. It would be irresponsible to raise interest rates until their is a clear indication of rising wages, which there is not.

The current 0.10% is an “emergency” rate….. yet the RBA now refuse to reset to “normal” rates? Clearly the real estate asset bubble is the “emergency”

RAISE INTEREST RATES. Stop propping up the self serving bubble you created. The pain will be worse the longer you leave it.

'It's what the Reserve Bank charges the banks to borrow in the short term or overnight.' No. It's the overnight rate between banks when they lend to each other when they have a shortfall of reserves.

My first home interest rate 16%

so the current Fed govt is an inflation genie. Because the level of interest rates, aka inflation, is always and inevitably a fed govt decision.

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