RBA Governor Philip Lowe warned of a number of international uncertainties at in his remarks at the RBA board dinner today.
He said escalation in trade disputes would “materially affect trade flows and investment plans around the world.”. And he emphasized that “as a country that has benefited greatly from an open rules-based international system, Australia has a strong interest in this not happening.”
Another risk is “material lift in inflation” in the US. Past experience of “large fiscal stimulus” when economy is at full employment with fast growth suggests that could “lead to inflation increasing significantly.”
Also, RBA is monitoring carefully the financial and economic problems in a number of emerging market economies with structural or institutional weaknesses, including Turkey, Brazil and Argentina.
