Market Analysis: Low Economic Literacy May Undermine RBA Rate Hikes

According to Jin10, the Reserve Bank of Australia surveyed 9,000 people and found that Australians were more concerned about high inflation than housing affordability, interest rates, and wage levels. The survey also found that the public lacked understanding of the link between interest rates and bringing inflation into the central bank's 2% to 3% target range. A large share of respondents incorrectly believed that higher borrowing costs would push up consumer prices, and in some cases this lack of understanding could weaken the impact of monetary tightening.