In his Testimony to the House Economics Committee, Reserve Bank of Australia (RBA) Governor Philip Lowe expressed his concern over the damaging and corrosive effects of high inflation. He further added that the bank will do whatever is necessary to make sure that inflation returns to its target range. He warned that it would be dangerous to not contain and reverse the current period of high inflation.
The Governor further stated that the bank expects further increases in interest rates over the months ahead, depending on the developments in the global economy, household spending, outlook for inflation and the labour market. He noted that the path ahead is a narrow one and it is important to make sure that people expect that the high inflation is only temporary. He cautioned that there are two risks – not doing enough to contain inflation, which would result in it persisting and proving costly to bring down, and moving too fast or too far.
Lowe also mentioned that inflation expectations remain well anchored and aggregate wage outcomes are not inconsistent with inflation returning to target. He noted that it is still possible for Australia to navigate the path, but it is also possible to be knocked off the narrow path. He was conscious of the fact that the impact of higher rates is being felt very unevenly across the community.
The Australian Dollar to US Dollar (AUD/USD) pair has not responded much to the macro as RBA’s Lowe refrained from giving any new signals from what he already spoke in the first round of the testimony. The Aussie pair is trading near 0.6875, after declining to a six-week low the previous day.
Inflation is a major factor for the central banks to decide the monetary policy. Inflation is a rise in the general price level of goods and services in an economy over a period of time. It erodes the purchasing power of money, leading to a decrease in the standard of living. High inflation is often damaging and corrosive, as it can lead to an increase in the cost of living, making it difficult for people to manage their finances.
The Reserve Bank of Australia (RBA) is the central bank of Australia and is responsible for setting the country’s monetary policy. The bank’s governor, Philip Lowe, recently expressed his concerns over high inflation, saying that it is damaging and corrosive. He also stated that the bank will do whatever is necessary to make sure that inflation returns to its target range.
The RBA governor added that it would be dangerous not to contain and reverse this period of high inflation. He further noted that the bank expects further increases in interest rates over the months ahead, depending on the developments in the global economy, household spending, outlook for inflation and the labour market. He warned that the path ahead is a narrow one, and that it is important to make sure that people expect that the high inflation is only temporary.
Lowe also cautioned that there are two risks – not doing enough to contain inflation, which would result in it persisting and proving costly to bring down, and moving too fast or too far. He noted that inflation expectations remain well anchored and aggregate wage outcomes are not inconsistent with inflation returning to target. He was conscious of the fact that the impact of higher rates is being felt very unevenly across the community.
The Australian Dollar to US Dollar (AUD/USD) pair has not responded much to the macro as RBA’s Lowe refrained from giving any new signals from what he already spoke in the first round of the testimony. The Aussie pair is trading near 0.6875, after declining to a six-week low the previous day.
Inflation is a major factor for the central banks to decide the monetary policy. Inflation is a rise in the general price level of goods and services in an economy over a period of time. It erodes the purchasing power of money, leading to a decrease in the standard of living. High inflation is often damaging and corrosive, as it can lead to an increase in the cost of living, making it difficult for people to manage their finances.
The Reserve Bank of Australia (RBA) is the central bank of Australia and is responsible for setting the country’s monetary policy. The bank’s governor, Philip Lowe, recently expressed his concerns over high inflation, saying that it is damaging and corrosive. He also stated that the bank will do whatever is necessary to make sure that inflation returns to its target range.
The RBA governor added that it would be dangerous not to contain and reverse this period of high inflation. He further noted that the bank expects further increases in interest rates over the months ahead, depending on the developments in the global economy, household spending, outlook for inflation and the labour market. He warned that the path ahead is a narrow one, and that it is important to make sure that people expect that the high inflation is only temporary.
Lowe also cautioned that there are two risks – not doing enough to contain inflation, which would result in it persisting and proving costly to bring down, and moving too fast or too far. He noted that inflation expectations remain well anchored and aggregate wage outcomes are not inconsistent with inflation returning to target. He was conscious of the fact that the impact of higher rates is being felt very unevenly across the community.
The RBA governor is aware of the fact that raising interest rates has a direct impact on the economy and the people, making it difficult for them to manage their finances. He is also concerned that if the bank does not take necessary steps to contain inflation, it could prove costly to bring it down in the future.
It is clear that the RBA governor is taking a cautious approach to the current period of high inflation, and is aware of the risks involved. He is conscious of the fact that the path ahead is a narrow one, and that it is important to make sure that people expect that the high inflation is only temporary. He is also aware of the fact that the impact of higher rates is being felt very unevenly across the community.
In conclusion, it is clear that the Reserve Bank of Australia (RBA) is taking a cautious approach to the current period of high inflation. The bank’s governor, Philip Lowe, has expressed his concerns over the damaging and corrosive effects of high inflation and has stated that the bank will do whatever is necessary to make sure that inflation returns to its target range. He has also warned of the risks involved in not doing enough to contain inflation, or moving too fast or too far. The Australian Dollar to US Dollar (AUD/USD) pair has not responded much to the macro as RBA’s Lowe refrained from giving any new signals from what he already spoke in the first round of the testimony. The Aussie pair is trading near 0.6875, after declining to a six-week low the previous day.
