Australia's central bank loses chief to public ire over rates

investing.com:

By Wayne Cole

SYDNEY (Reuters) — The head of Australia's central bank suffered an early end to his 43-year career on Friday as past missteps in pandemic policy so tested public trust in the institution that the government felt compelled to drop him.

If there's a moral to the tale of Reserve Bank of Australia (RBA) Governor Philip Lowe it's that when it comes to policy stimulus, no matter how well meaning, it is possible to do too much.

Lowe's (NYSE:LOW) dedication to the bank is not in doubt, having joined straight from school in 1980. Armed with a doctorate from MIT, he steadily climbed the ranks to deputy governor in 2012 and the top job four years later.

Whip-smart and soft spoken, Lowe was determined to use all the RBA's powers to support the economy when the pandemic struck and Australia closed its borders, along with much of its economy.

A series of cuts took interest rates to an all-time low of 0.1%, while the bank pumped hundreds of billions of dollars into the economy through bond purchases and cheap loans to banks.

When combined with massive fiscal spending from the government, the stimulus proved wildly successful and Australia became the first developed nation to recover the economic output lost to the pandemic.

Even now, unemployment is near its lowest in 50 years at 3.6% and there are more Australians in work than ever before.

The use of so much unprecedented policy carried risks, however, and Lowe made two major missteps. The first mainly impacted markets while the second, and more fateful, soured sentiment with the public and politicians.

The first came in late 2021 when Lowe, faced with strains in the debt market, decided to abruptly end the bank's purchases of short-term bonds, a major plank of its