Reserve Bank of Australia Governor Lowe spoke at length on Friday, summary here (links etc):
Reserve Bank of Australia Governor Lowe testifying to a parliamentary committee.
In the wrap I noted:
- Lowe did concede that it is plausible that if the economy tracks to the Bank's forecasts a rate hike will be on the agenda later this year.
Fleshing this out a little:
“ But it is certainly plausible, if the economy tracks in line with our central forecast, that an interest rate increase will be on the agenda sometime later this year."
That's a big pivot from the 2024 data Lowe and the Bank had been insisting on. Lowe added what the Bank is watching to trigger a rate hike:
- evidence that inflation is sustainably in the two to three per cent range,
- evidence about the development of labour costs
- and evidence about the resolution of supply chain problems.
And on the inflation front:
- We get the CPI quarterly. I think just having one more CPI is not enough for that evidence to emerge, but, over time, if things line up in a positive direction then we will be discussing this later in the year.
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The minutes tomorrow will be pored over for further clues, although what Lowe had to say on Friday was pretty clear.
