Bad Medicine

Bad medicine: Why the RBA is right to increase rates

In February the Reserve Bank of Australia (RBA) increased official interest rates again, this time another 25 basis points. The official interest rates are now 3.35% pa, up from 0.1% pa in May last year, an increase that is sure to be causing mortgage stress and rental increases amongst the most vulnerable.

But, as bad as high interest rates are, they are better than the alternative; high long-term inflation. That’s why the RBA is right to keep increasing interest rates.