The Impact of the Cash Rate and Interest Rate Rises on the Rental Market

The RBA deputy governor Michelle Bullock was pretty upfront about this in a speech last week. She said risking higher unemployment is a natural and expected consequence of high risk rates. The fundamentals are an imbalance of aggregate supply and aggregate demand. We're essentially left with no choice but to try to target aggregate demand, which of course does risk higher unemployment. It's really important to be realistic about the fact that there is no real way to get inflation down without imposing costs. Like Trent said, you can't just increase the productive capacity or aggregate supply overnight. Make as economists, politicians are always trying to make the economy more productive.