Is raising rates the wrong answer to inflation?

ProPublica said shipping line margins hit 57% in the March quarter from single digits pre-pandemic. (Image: NZ Herald)

Tue, 21 Jun 2022

Something tells me raising interest rates is the wrong response to the undoubtedly worrying high inflation the world is experiencing.Our own Reserve Bank started relatively early, hiking its official cash rate (OCR) from 0.25% to 2% between October and late May, and it will probably hike a further 50 basis points to 2.5% when it releases its next monetary policy statement on July 13.But it’s far from alone. The US Federal Reserve hiked by 75bps last week, its biggest hike in nearly 30 years and its third move up since March.Around the wor...

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