No one likes interest rate increases but he had to lift rates last week or risk leaving it too late and potentially having to increase them a lot higher down the track.
Just have a look at what's happening around you. The residential property market is starting to overheat, consumers are still spending, unemployment will peak around the 6% mark rather than the expected 8% and company profit outlooks are rosier.
It's the property boom which would be of most concern to the RBA and the area which needs to be dampened quickly.
While the rest of the world economy is still struggling, the global financial crisis is officially over for Australia even though it turned out to be a lot wimpier than the pessimists expected.
Admittedly the Reserve Bank was a little slow to pick the economic downturn and shouldn't have passed on the last rate hike in March 2008, but they admitted their mistake quickly and decisively slashed rates soon after to levels not seen for 50 years.
It was that decisive action, plus the surpluses of the Coalition and the good economic management of the current Government, which have generally insulated us from the worst of the global crisis.
But you need to keep all these measures in perspective and relate them back to where we are in the economic cycle.
Remember economies move in cycles. Every boom ends in a bust and every downturn eventually starts to improve.
The key is timing the cycle.
Australia's official interest rates were slashed to a historically low 3 per cent because everyone thought the global economy was headed down the toilet with many forecasting a Depression. That cut was a Depression-fighting level and it worked.
A "normal" official interest rate level for a "normal" Australian economy is seen to be around 5-6% and that's where we'll eventually get back to in two years or so.
Because our economy didn't go in to Depression and has started to bounce back, the Reserve Bank has to start readjusting rates toward those normal levels.
Last week's 0.25 percentage point rate rise will probably be followed by three more similar rises over the next six months.
That will take official rates back to 4 per cent which is still way below "normal"' level, which means the Reserve Bank is hedging its bets against a big economic calamity overseas.
If that calamity doesn't happen then expect official rates to move up more quickly towards that 5-6 per cent mark.
That's the type of scenario you should be planning on over the next couple of years.
Mortgage rates could rise significantly and if you haven't got your debt levels under control then you're going to find it pretty tough.
Think of a car bogged in sand. You stick some wood under the wheels for traction (that's the Government's stimulus package), you then rev it up and step on the gas (cut interest rates) but when you're on solid ground you have to ease the accelerator (lift interest rates) or the car gets out of control and may crash.
The same with an economy.
If you need convincing, just look at the residential property market.
Houses which have been on the market for the last 18 months in our area have all sold in the last three weeks and I'm getting the same story from friends and Sunrise viewers in all the major capital cities.
A relative of ours sold their house to the first person who saw it and we sold a little investment unit in our superannuation fund on the first weekend it was open for inspection. Crazy stuff.
One of the main reasons our economy didn't plunge to the depths of the US and Europe was that our property values held up because of a lack of stock. US house prices dropped on average 25-30 per cent and it was the same, if not a little worse, in the UK.
By comparison with the rest of the world our residential property prices are very high.
They stagnated during the financial crisis rather than crashed. The last boom simply took a breather and is off again.
That worries us because there was really no major correction to speak of and the bigger the boom, the bigger the bust when it eventually comes.