27 Feb Nine key lessons for today from the 1970s, 80s and 90s
Key Points:
- The experience of the high inflation 1970s and its aftermath hold key lessons for today. In particular, that once high inflation becomes entrenched in expectations that it will stay high, inflation is very hard to get back down but also that there are lags in the way monetary policy impacts.
- Whether the RBA and other central banks have done enough is a judgement call. The RBA is signalling that it has not yet done enough so more rate hikes are on the way. Our view is that the RBA has likely already done enough. Upcoming retail sales and jobs data are critical in this.
