RBA Lowe: Inflation is way too high, needs to come down

The Reserve Bank of Australia’s governor Philip Lowe said inflation is way too high and that it needs to come down.

The AUD/USD pair holds lower ground near 0.6980 after Philip Lowe’s Testimony during the mid-Asian session on Wednesday. The pair appears to give more weight to the hawkish Fed signals and the market’s offbeat mood ahead of the key data/events from the US and Australia. The pair is trading at 0.6979 at the time of writing versus the previous closing at 0.69831.

Lowe said, “Inflation is way too high,” and that it needs to come down. The policymaker, however, also stated that the government fiscal policy is broadly neutral, which in turn suggests the need for other efforts to tame inflation than the rate hikes. The same seemed to have favored the Aussie bears in keeping the reins around the daily low.

Key Quotes

The current monetary policy stance is restrictive.

Government fiscal policy is broadly neutral.

There is a risk rba hasn’t done enough with rates.

It is not our objective to send the economy into recession.