Opinion: Lowe outlines painful climb to reach peak inflation | EKnightOfficial
Reserve Bank governor Philip Lowe is hoping for his goldilocks pain moment for interest rates - enough hurt to curb consumers’ current level of spending but not a level of pain that will have the economy gasping for morphine.
The RBA’s view is that inflation will peak in Australia at 7 per cent in December but that it will start to move down in 2023. The second piece of near term, and therefore reliable, intel from Lowe is that when the RBA board meets again in early July it will be tossing up between a 25 basis point rise and a 50 basis point rise in rates. And this is important because a number of market economists were pencilling in a 75 basis point hike.
It is important for the RBA to jawbone the population into seeing the current inflation spike as aberrant rather than the new normal.
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