non archived version here (i use FF and the ByPass Paywalls extension)

https://www.afr.com/politics/federal/the-rba-s-problem-is-we-re-all-too-rich-20260507-p5zura

The bank’s fight against inflation is much harder due to the extraordinary boom in household wealth, which is keeping the economy motoring along. Expect interest rates to stay high.

We’re one of the richest countries in the world, with one of the fastest growth rates of wealth, too. What that means is that the consumer’s resilience to an income shock is greater than what was in the past.”

Second only to Luxembourg

Why? Because for all the talk of sinking consumer confidence due to rate hikes and the Iran energy shock, the economy is absolutely motoring along.

Consumers are holding up well, too. The household spending indicator, released just before the RBA’s decision on Tuesday, suggested consumption growth is running at an annualised rate of 6.5 per cent, which Tharenou suggests GDP growth for the March quarter could come in at 2.75 per cent, an acceleration from the December quarter.

But Tharenou keeps coming back to those numbers around Australian wealth. Reducing aggregate spending is going to be very tough because we are sitting on so much wealth.

These are numbers that sum up the feeling that so many of us have, when we hear about a cost of living crunch, but can’t get a table in a restaurant on a Saturday night, or pay through the nose for a seat on a plane.