In this episode, Monica speaks with economist and journalist Adam Creighton about inflation, interest rates, and the economic forces shaping Australia’s future.

They begin by examining the drivers of persistent inflation in Australia, including the interaction between monetary policy, fiscal policy and government spending. Adam explains why inflation has remained stubbornly above target and how central banks attempt to balance economic growth with price stability.

The conversation then turns to interest rates and bond markets, discussing what long-term government bond yields signal about future inflation and economic expectations. Monica and Adam explore how financial markets interpret government spending, deficits and productivity growth when pricing long-term borrowing costs.

They also examine the structural challenges facing the Australian economy, including slowing productivity growth, the expansion of the public sector, and the impact of regulation on business investment and housing supply. The discussion touches on how these forces shape wage growth, living standards and long-term economic competitiveness.

Finally, they discuss the broader political economy of reform in Australia — why productivity-enhancing reforms have become more difficult to implement and what policy changes could improve Australia’s long-term economic trajectory.

Adam Creighton is Chief Economist at the Institute of Public Affairs and one of Australia’s most prominent economic commentators. He was previously Economics Editor at The Australian and later Washington Correspondent for the paper. You can follow Adam on X (Twitter) at @Adam_Creighton where he regularly writes about economics, public policy and financial markets.

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