Hunting for a culprit: Open season on RBA’s Lowe

Australians love their sport and they love to gamble. Sadly, for the Reserve Bank governor the sport de jour is Lowe bashing, as they punt on whether his employment contract will be extended beyond its September term.

The chorus of criticism directed at the Reserve Bank is getting louder and Philip Lowe has become the lightning rod for community anger from those struggling to pay the hefty increases in interest rates.

The acrimony is unsurprising. Those that took out mortgages in 2021 when Lowe declared the ultra-low interest rates were set to stay for years, feel they have been duped.

That simmering disdain hasn’t gone away. Rather it has become more intense and more personalised. Lowe has become the public service equivalent of Qantas boss Alan Joyce who had his house hit with eggs and toilet paper at the height of the lost luggage/cancelled flights drama.

In recent days, the RBA’s decision to lift rates for the ninth time in ten months, while forecasting more rate hikes are on the horizon has attracted a legion of additional critics. And this pitchfork wielding mob are further validated by a group of politicians who have jumped on the bandwagon.

And Australians understand that additional rounds of interest rate rises threaten larger falls in the value of their homes.

Until this week, the consensus from economists was that the peak to trough fall in house prices would come in at circa 15 per cent. But now these are beginning to look conservative. Jarden economists, for example, have revised their expectations and are forecasting a fall of between 20 per cent and 25 per cent.

Last year the federal government looked to stem any politician contagion from the community’s anger around interest rates by announcing a review of the Reserve Bank, which is set to report its findings next month. But federal treasurer Jim Chalmers has rightly avoided any public criticism of the RBA’s interest rate moves.

However, for talk back radio hosts it has been season – lambasting Lowe is an audience winner and clearly some politicians see it as a potential vote winner – if their electorates sit in the mortgage belt.