The United States is a quirky place, and its mortgage industry is no exception. Instead of borrowing at variable rates like we do Down Under, when you take out a mortgage in the good ol' US of A you’re generally locking in the rate for 15 or 30 years. Now banks borrow short and lend long – how on Earth do they manage the enormous risk of maturity mismatch that this model entails?

On Tuesday the Reserve Bank of Australia (RBA) surprised everyone, hiking rates by 25 basis points to combat persistent inflation (financial markets were pricing in 100% chance of no change). The usual suspects wasted no time reaching for their pitchforks. Daniel Andrews, Premier of Australia’s most indebted state, Victoria, blamed the RBA for his own government’s lavish spending:

Yesterday the government released the independent review of the Reserve Bank of Australia (RBA), along with confirmation that it would accept all of its recommendations. I’m not going to go over all 51 of them here but will say that on balance it appears to be little more than tinkering on the margin, an outcome that was always likely given the authors: a former Canadian central banker, a former Treasury bureaucrat and an academic.

It must be open season on the Reserve Bank of Australia (RBA), because the central bank was recently savaged by both Deloitte Access Economics and business journalist Alan Kohler, for very similar reasons. First Deloitte: “Our view remains unchanged – the additional 50 basis points of increases earlier this year were unnecessary, and have prompted a further downgrade in Australia’s growth outlook.

Last week witnessed two fascinating developments in the monetary realm. First, the Reserve Bank of Australia (RBA) put a halt to its tightening cycle, citing the long and variable lags of monetary policy and the need to assess the impact of the interest rate hike on the economy: “The Board recognises that monetary policy operates with a lag and that the full effect of this substantial increase in interest rates is yet to be felt.

The Reserve Bank of Australia (RBA) ended its run of ten consective rate hikes at its meeting today, leaving the cash rate unchanged at 3.6%. That’s ten hikes excluding January of course, which for some reason is a month during which the RBA Board does not meet. Was there a case for a pause?

Anyone calling for an end to, or watering down of, central bank independence should ask - compared to what. The alternative, i.e. central banks falling further under the influence of politicians such as Stephen Jones, will almost certainly lead to even worse outcomes.