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- RBA’s Lowe: Decision to hold rates steady does not imply interest rate rises are over
RBA’s Lowe: Decision to hold rates steady does not imply interest rate rises are over
Reserve Bank of Australia Governor Philip Lowe is speaking on the topic titled ‘Monetary Policy, Demand and Supply’ at the National Press Club, in Sydney, on Wednesday. Audience questions are expected.
Key quotes
Decision to hold rates steady does not imply interest rate rises are over .
Board expects that some further tightening of monetary policy may well be needed.
Prudent to hold rates steady this month to allow more time to assess impact of past increases.
At our next meeting, we will again review the setting of monetary policy and updated forecasts.
Board is conscious monetary policy operates with a lag, of economic uncertainties.
Pause is consistent with our practice in earlier rate cycles.
Was common to move rates multiple times, then wait for a while and move again if necessary.
Increasingly clear higher interest rates are having an impact on household spending.
Wage outcomes have been consistent with inflation returning to target.
Recent high inflation has not been driven by excessive wages growth.
Inflation has not been driven by ever-widening profit margins.
While supply-side factors are influencing how fast inflation declines, they cannot be a reason to tolerate higher inflation on an ongoing basis.
Banking stress is another headwind for the global economy.
Market reaction
In reaction to the above comments, AUD/USD is trading 0.25% higher on the day at 0.6767. The comments fail to have limited impact on the Australian Dollar.
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