The RBA's decision to keep interest rates lower than other major economies has had a significant impact on Australia's unemployment rate. Almost 200,000 Australians would have been unemployed if the RBA had hiked rates harder and faster, according to a startling claim by RBA chief economist Sarah Hunter. But here's where it gets controversial... While the RBA's strategy has kept unemployment low, it has also led to a different interest rate path compared to other central banks. If the RBA had followed the lead of its UK, US, Canadian, and New Zealand counterparts, unemployment would have hit 5.3% in late 2025, 190,000 more people than the current level. This would have brought underlying inflation down to 2.5% last year, but at a cost. A 5.5% cash rate peak would have meant an extra $500 a month for a $600,000 mortgage holder. So, while the RBA's approach has kept unemployment low, it has also led to a trade-off between inflation and interest rates. What do you think? Do you agree or disagree with the RBA's strategy? Share your thoughts in the comments below!
