Imagine you and your friends are in a horror film and the monster is coming right for you.

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Your friends have lots of great monster-killing weapons. All you've got is a bomb. Sure, your bomb will kill the monster, but it'll hurt you and your friends in the process.

The good news is that your friends have everything they need to kill the monster. The bad news is that they are sitting in stunned silence, not doing anything.

What do you do? Do you blow up the monster even though the explosion will hurt you and your friends? Or do you do nothing and just let the monster eat you and your friends?

The growing number of commentators and politicians who are saying that the Reserve Bank shouldn't be increasing interest rates are basically arguing for the latter: do nothing and let the monster eat us all.

The RBA, thank goodness, has opted for the former: blow up the monster even though it'll cause us a bit of pain and suffering in the process. It's obviously not the best option. But if our friends aren't willing to act, then it's better than being eaten.

In case this analogy isn't landing, the monster is inflation, the person with the bomb is the RBA, and the friends best placed to solve the problem are state and federal governments.

What, in this analogy, are the commentators and politicians who are saying that the RBA shouldn't be increasing interest rates? Out of their minds. That's what they are.

Their argument starts from a sensible observation: the RBA is not the one who's best placed to fight the monster. This is true for least two reasons.

First, a big chunk of our inflation - up to two-thirds by some measures - is coming from the supply-side. This includes fuel prices from the Iran War, insufficient housing supply, rising health costs, insufficient supply of goods........

© Canberra Times