The Interplay of Employment and Interest Rates

Inflation’s now at its lowest level in more than three years, so when’s the interest rate cut coming? 

One factor the RBA is looking at is the unemployment rate which might need to rise before it acts.  

Today, chief business correspondent Ian Verrender on the old economic theory linking unemployment and inflation and his prediction on when interest rates will start to fall.

Ian Verrender highlights the delay in the impact of interest rate changes, likening it to adjusting a shower’s temperature. 

He discusses the Phillips Curve theory and its relevance to current economic conditions.

Verrender predicts a possible rate cut before Christmas, emphasising the delicate balance the RBA must maintain.

Featured: 

Ian Verrender, ABC Chief Business Correspondent

Key Topics:

• Inflation rates
• Interest rates
• Unemployment rate
• Reserve Bank of Australia (RBA)
• Phillips Curve theory
• Central bank policies
• Michele Bullock
• Australian economy