Live updates: Wall Street up, Australian market continues to digest rate hike

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The Australian market continues to react to yesterday's rate hike by the Reserve Bank.

After all the flurry of yesterday, I came back to an article I wrote mid-year about otherThere's plenty of them, given we're essentially talking about taking 'demand' or heat out of the economy.

The problem is they're often slow, hard, politically risky and not always guaranteed to work, at least not without the risk of unintended consequences.Intervene in markets to cap or freeze prices in certain sectors Put a super-profits tax on particular industries and save the proceeds or use them to subsidise consumer prices

Temporarily lift the amount employers pay in superannuation for workers in substitution for some part of wage increasesPass interest increases on deposits faster, encouraging savingChange competition laws to reduce large corporate powerApplying some or all of these changes might lower infation The first two — a cap on gas prices and increasing tax on the industry's profits — we're already doing.None are as quick and simple as lifting interest rates, which takes money out of the economy as households cut back spending to make payments on the roof over their head.Australian dollar: -0.9% to 64.3 US centsFTSE1000: +0.1% to 7,410 pointsBrent crude: -3% to $US82.

 

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