RBA Waits To Assess Uncertainties

“Not yet at point where inflation sustainably in target,” said Reserve Bank of Australia (RBA) Governor Philip Lowe at the Australian Financial Review Business Summit on early Wednesday morning in Asia.

Additional Quotes:

“I recognise that there is a risk to waiting too long, especially in a world with overlapping supply shocks and a high headline inflation rate. But there is also a risk of moving too early,” adds RBA’s Lowe.

Plausible the cash rate will be increased later this year.

Closer to point where inflation sustainably in target range, but not there yet.

Moving too early on rate rise carries risks to achieving full employment.

Will do what is necessary to maintain low and stable inflation.

We have scope to wait and assess incoming information on inflation and wages.

Watching how war in Ukraine adds to supply-side inflation pressures.

Extended period of high inflation could feed through to inflation expectations, wages.

Eurrent evidence shows most wage rises still under 3%, pick up still gradual.

Sees strong growth in hours worked, jobs over the months ahead.

Data suggests economy growing despite floods, omicron outbreak.

War in Ukraine a new major downside risk to the global economy.

Main economic effects of war stem largely from higher commodity prices.

Australia to benefit from higher terms of trade, but extra income likely to be saved.

Still need wage growth above 3%.

Risks on inflation have moved to the upside.

Still not clear that high inflation will be sustained in Australia.

Do not have a plan locked in on rates, looking every month.

Can afford to look through period of high inlation.