RBA Governor Philip Lowe reiterated in a speech that Australia has the “scope to wait and assess incoming information” before working on interest rates.
He highlighted two issues that policymakers are “paying close attention to”. The first is the “persistence of supply-side price shocks” and the extent of impact from Russia’s invasion of Ukraine. Secondly, that’s “how labor costs in Australia evolve”.
He noted that “given the outlook, though, it is plausible that the cash rate will be increased later this year.” There is both a risk to “waiting too long” and “moving too early”. But Low finished with the point that “it is only possible to achieve a sustained period of low unemployment if inflation remains low and stable”. And, “recent developments in Europe have added to the complexities here.”
