Philip Lowe

2023 - 2 - 18

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Image courtesy of "The Sydney Morning Herald"

Five hours of questions – but just one mattered for RBA boss Phil ... (The Sydney Morning Herald)

'Can you explain to the renters and mortgage-holders of Australia why you still deserve to hold your job?' asked the Greens' economic justice spokesman, ...

It was the fourth speech this year by a BoE expert on monetary policy. That review, which will recommend changes to the bank’s operation, is due to report on March 31. I need to hear what financial markets say and I like asking people questions,” he said. Lowe, his deputy Michele Bullock and Treasury secretary Steven Kennedy are three of the board’s nine members. No one, even within the Reserve Bank, is exactly sure how all these people are going to deal with such high mortgage rates. [Subscribers can sign up to our weekly Inside Politics newsletter here](/link/follow-20170101-p5apym). In pure dollar terms, the RBA’s rate increases have lifted the monthly repayments on an average $604,000 mortgage by more than $1100. KPMG Australia chief economist Brendan Rynne estimates that’s a $20 billion cut in spending across the economy. Less than a year ago, the official cash rate was 0.1 per cent. For the first time, a Reserve Bank governor faced two separate parliamentary hearings within two days. Once you factor in population growth, that’s two years of zero growth. We want to get inflation down because it’s dangerous.

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Image courtesy of "Sky News Australia"

Philip Lowe under scrutiny as comments about nine per cent ... (Sky News Australia)

Herald Sun business commentator Terry McCrann has refuted claims that Reserve Bank Governor Philip Lowe was predicting a nine per cent unemployment rate.

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Image courtesy of "Mirage News"

RBA Governor Philip Lowe Statement to House of Reps: Full Text (Mirage News)

We have a critical mandate to preserve medium-term price stability and we are committed to that objective. If we don't get on top of inflation and.

The current $5 banknote will continue to be issued until then and it will still be able to be used once the new banknote enters circulation. The share of working-age Australians with a job has never been higher than it has been recently, youth unemployment has declined and underemployment is the lowest it has been for decades. We will do what is necessary to make sure that inflation returns to the target range. We have not yet seen evidence of a moderation of goods price inflation in Australia, but we have seen it elsewhere around the world and we expect the same to take place here. But it is also possible that the extra savings and jobs are giving part of the population sufficient confidence to keep spending, just at the same time that others are finding things very difficult. So, it is important that people expect that the high inflation is only temporary. Some are more concerned about the prospect of a sharp rise in unemployment in the near term, while others are more concerned about the prospect of inflation staying too high, which would in time entail even higher interest rates and a sharper rise in unemployment. If we don’t get on top of inflation and bring it down in a timely way, the end result will be even higher interest rates and more unemployment in the future. As the central bank, we have a critical mandate to preserve medium-term price stability and we are committed to that objective. The central forecast is for CPI inflation to decline to 4¾ per cent over 2023 and to around 3 per cent by mid-2025. Our assessment is that inflation is likely to have peaked around the end of 2022 and will now start declining. One is the risk of not doing enough, which would result in high inflation persisting and then later proving very costly to get down.

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Image courtesy of "ABC News"

RBA boss admits rate rises causing pain (ABC News)

Reserve Bank Governor Philip Lowe has given a strong indication more interest rate rises are on the cards despite causing households significant stress.

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Image courtesy of "The Saturday Paper"

Lowe regard: RBA governor fights for his job (The Saturday Paper)

The timing of Philip Lowe's private meeting with bankers has sharpened criticism of the central bank, amid a review and growing doubts that his term will be ...

“Academics who run the central banks in other countries are just much more open and clear than the bureaucrats and businessmen that we have.” “Whether or not he thought he said something, the people in the room thought he said something. Lowe said he thought the order of things “was manageable” but now regretted attending the lunch first. “Nobody in that organisation seemed to realise just how inappropriate it was to privately brief bankers before speaking to the Australian people,” he says. “It has a culture of secrecy, which I think leads to serious mistakes in monetary policy.” That is, it doesn’t require a parliamentary vote to deploy, and is more effective than the fiscal policy tools at executive government disposal, which should be used for structural reform. “There was,” Lowe emphasised, “nothing untoward here.” In case the senators missed it, he repeated the assertion, and then made it a third time. And the other piece of feedback I had was that to start the year, it’s better to address the questions of the parliament rather than the media.” “I’m the spokesman for the board on monetary policy,” he said. While continuing to insist the comments were always qualified, he has conceded they were heard as a promise, and some people may have made purchasing decisions accordingly. Communication is a key focus of criticism levelled at Lowe and his board, and Treasurer Jim Chalmers revealed last weekend that he is particularly concerned about how the bank conveys its decisions and their context. “It’s not just me,” the governor agreed, when Liberal senator and shadow Finance minister Jane Hume suggested he was being unfairly singled out.

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Image courtesy of "The Guardian"

A 'fantastic place to live', Philip Lowe? Tell that to those struggling ... (The Guardian)

RBA governor says 'capitalism works' but maybe just a little bit of slack from his institution is what the country needs.

That is the main constraint on them investing.” A 4.4% reduction in real wages, if that is the result, would eclipse the record 4.2% gap set just three months earlier in the September quarter. Lowe said these were “quite substantial wage increases”, although far shy of inflation. Next Wednesday the Australian Bureau of Statistics will release the December quarter wage price index. The discussion of buffers is instructive in another way. Good luck to renters using that line with landlords seeking to claw back some of their higher debt repayments. Capital cities reported a 10.9% annual pace of rental growth last month, and with migration and overseas students returning in droves, tenants aren’t likely to see much relief soon. (The ABS says prices of “non-discretionary” goods that presumably people can’t avoid buying rose by 8.4% annually in the December quarter.) “What we hear from business is that the cost of funding is not a major issue,” he said. A third of mortgagees are two years ahead or more. “Capitalism works,” he said. “Sometimes we complain a lot in this country but we enjoy a quality of life and a standard of living that very few other people in the world enjoy.”

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Image courtesy of "The Age"

Lowe might yet be a scapegoat, but he is right about inflation (The Age)

Lowe and the Reserve Bank board have certainly made mistakes. The interest rate “prediction” was unnecessary and rash. With banks offering fixed loans at that ...

[The Age's View](/by/the-age's-view-p4yvip)– Since The Age was first published in 1854, the editorial team has believed it important to express a considered view on the issues of the day for readers, always putting the public interest first. If anybody deserves to find a baying mob at their door, it is surely the banks. Lowe’s – again, incautious – comment this week that staying the course on rate rises offered an opportunity to tackle inflation Complicating matters for Lowe and his board still further is our unique mortgage predicament: the tens of thousands of home owners whose cheap fixed-rate loans are about to reset to the much higher current rate this year and next. [argues economist Steven Hamilton](https://www.theage.com.au/business/the-economy/another-tuesday-another-rate-rise-you-should-be-ropeable-20221205-p5c3v1.html), we should be angry with the RBA not because it eventually raised rates – the only tool it has to curb inflation – but because its delay in doing so was the result of deep-seated cultural failings. Lowe, to give him his due, is right to try to warn us of the dangers of persistent inflation, which insidiously eats away at the true value of savings, compounds price rises and ultimately destroys living standards. For the government, which ultimately bears most of the responsibility for the economy’s various woes, the governor is an increasingly convenient scapegoat. But the treasurer and the governor have a good relationship and that hasn’t changed.” He was grilled by parliamentary committees and pilloried on talkback radio and breakfast television, not least for his 2021 remark that interest rates would not increase until at least 2024 – then shocking home owners with nine straight rate rises and the threat of more to come. But even he was later criticised for failing to predict the collapse of the banks and their subsequent unpopular bailout with taxpayer dollars. “You seem prepared to smash Australia into a recession,” Greens senator Nick McKim told the governor in committee hearings this week. Lowe and the Reserve Bank board have certainly made mistakes.

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Image courtesy of "The Sydney Morning Herald"

Lowe's a convenient punching bag for a government suddenly on ... (The Sydney Morning Herald)

When the RBA governor had finished his performance before the Senate economics committee, Jim Chalmers phoned him from his office for a chat.

So his critics can hold Lowe responsible for not just the mortgage shock that’s to come, but for misleading them with the suddenness of it. [Peter Hartcher](/by/peter-hartcher-hve0w)is political editor and international editor of The Sydney Morning Herald and The Age.Connect via But the treasurer and the governor have a good relationship and that hasn’t changed. The temptation to scapegoat Lowe will be powerful. He explained he was not complaining, that he had a job to do: “That’s why the central bank is independent in its decision-making from the political process. We make them collectively and collaboratively, and the board has made these decisions and I think it would be a very bad outcome for the board to have to resign. When Kwarteng spoke at the IMF meeting in front of the other countries’ delegations, Bailey ostentatiously turned his back; when Bailey spoke, Kwarteng buried his head in his papers. That said, it’s an important job that comes with public accountability as part of the process, but I intend to serve out that term. He explained why the bank had raised rates and would continue to: “We want to get inflation down because it’s dangerous. Growth is slowing, unemployment is rising and the cost of living is soaring. Lowe has been the head of the central bank for almost seven years. The “papping” was intense enough for the ABC’s Media Watch to remark on it this week.

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Image courtesy of "PerthNow"

Disturbing reality of RBA rate hikes revealed as Philip Lowe faced ... (PerthNow)

One in 10 variable rate mortgage holders are in stress, with “no spare cash flow” to speak of, as the RBA continues to increase interest rates.

It’s possible, but there are other scenarios as well,” he said. Dr Lowe conceded on Friday the central bank “did too much” when it dropped the cash rate to a historic low of just 0.10 per cent during the pandemic and had since been forced to “backtrack”. The RBA has come under fire since lifting the official cash rate — which guides interest rates set by lenders — a record nine consecutive times since May to 3.35 per cent this month.

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Image courtesy of "Michael West News"

The RBA Nine: Phillip Lowe cops the blame but who makes the ... (Michael West News)

As interest rates rise, the blame is lumped on Phillip Lowe. Callum Foote looks at a central bank board stacked with Liberal appointments.

Governor Lowe is hesitant to release the voting records of his private members on his board. Born Carol Judith Besen in Melbourne, she is the daughter of billionaire founders of fashion retailer Sussan, Marc and Eva Besen. Callum Foote is a journalist and Revolving Doors editor for Michael West Media. Ian Harper is an economist and current dean of the Melbourne Business School. Hewson is a former investment banker with over 35 years’ experience in the finance sector. He is a director at the liberal-backed Robert Menzies Institute. Schwarts is an Australian business executive, community leader and philanthropist. Adding his roles as a senior fellow at the accounting firm EY Oceana and a senior advisory board member for mining private equity firm Appian Capital Advisory, makes Mark Barnaba a very busy man. The Bank of England has the Monetary Policy Committee (MPC) whose nine expert members decide what monetary policy action to take. His day-job is being deputy chair and the lead independent director of Fortescue Metals Group, Andrew “Twiggy” Forrest’s billion-dollar iron mining operation. Unlike in the UK and the US, the RBA’s board has potentially inexperienced political appointees who can outvote experienced experts on monetary policy. Board members are appointed by the Treasurer.

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