RBA’s Debelle: There has not been any material upside surprise in inflation
|“There has not been any material upside surprise in inflation,” the Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle said in a speech titled "Monetary Policy during Covid" at the Shann Memorial Lecture, adding that the central bank “will not raise cash rate until actual inflation is sustainably within the target band.”
Additional quotes
Economic recovery "significantly exceeded" even most optimistic expectations.
But that is not the case for wages and inflation in Australia.
Wages growth has been noticeably weaker than in many comparable economies.
Need to see further significant gains in employment, lower unemployment rate.
Need a tighter labour market to lead to higher wage rises.
Do not expect these conditions to be met until 2024 at the earliest.
State of economy is key determinant of policy settings, not the calendar.
Decision on 3yr bond to take account of economy, financial conditions, other central banks.
Need to be mindful that RBA bond purchases do not cause dysfunction in bond market.
Number of tools to deal with house prices, monetary policy not one of them.
Market reaction
AUD/USD keeps its range near 0.7750 on Debelle’s comments, consolidating the bounce to session highs of 0.7756.
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