Speaking at the Australia Institute’s Bernie Fraser Oration, former Reserve Bank of Australia (RBA) governor Bernie Fraser questioned the central bank’s strategy of hiking up interest rates to help lower inflation.
Wed 14 Oct 2026 12.14 AEDT
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Speaking at the Australia Institute’s Bernie Fraser Oration, former Reserve Bank of Australia (RBA) governor Bernie Fraser questioned the central bank’s strategy of hiking up interest rates to help lower inflation.
“We can see all these increases in interest rates,” he said.
“They won’t do much to solve the inflation problem.
“But they are causing a lot of pain and agony for a lot of working people.”
The RBA board has warned that further interest rate increases could be on the cards if inflation continues to climb.
At its last meeting, the RBA raised rates for the fourth time this year, taking the cash rate to a 15-year high.
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Mr Fraser, who held the top job from 1989 to 1996, drew on his own experience last night to argue the RBA was “over-preoccupied” with inflation at the expense of its other responsibilities, including employment.
Mr Fraser also suggested the Treasurer be more outspoken in his criticism of the RBA, recalling his own dealings with former treasurer Paul Keating.
“I had some interesting ones with Paul Keating, but we still managed to work very closely together,” he said.
“And I just wonder sometimes, Treasurer, whether now might be the time to sort of be not quite as so polite in your public discussions or references to the Reserve Bank.”
The Australia Institute’s chief economist Greg Jericho criticised the bank’s decision in September, arguing there was no data to justify the increase and it was inflicting “unnecessary pain”.
