Reuters reported Reserve Bank of Australia's governor, Phillip Lowe said on Wednesday said it was closer to pausing its aggressive cycle of rate increases as the policy was now in the restrictive territory and there were signs the economy was responding.
The Reserve Bank of Australia (RBA) on Tuesday lifted interest rates to an 11-year high of 3.60% and flagged more tightening would still likely be needed to tame inflation.
Key notes
Closer to point where it will be appropriate to pause interest rate increases.
Timing of pause will be determined by data and our assessment of the outlook.
Further tightening likely to be required to bring inflation back to target.
Recent rate increases have moved monetary policy into restrictive territory.
Board discussed policy lags, large rate rise already delivered and impact on households.
Need to get inflation down fairly soon to keep expectations anchored.
Wage and gdp data suggest risk of a prices-wages spiral remains low.
Remain alert to wage risks given the tight labour market.
Monthly CPI showed welcome drop in Jan, first sign of slowing goods inflation.
Inflation in services and rents still growing briskly.
Bounce-back in spending following pandemic has now largely run its course.
Cost-of-living pressures, higher rates, fall in house prices weighing on consumption.
January drop in jobs likely statistical noise, looking to see a rebound in February.
Underlying inflation globally is proving to be uncomfortably persistent.
AUD/USD update
AUD/USD is licking its wounds by over 2% lower from where it started out on Tuesday following a combination of a dovish RBA and hawkish Federal Reserve chairman.
More here: AUD/USD falls heavily as bears move in towards the 0.6580s target area
About Philip Lowe
Philip Lowe replaced Glenn Stevens as governor of Australia’s central bank. Lowe was the Deputy Governor of the Reserve Bank of Australia, a position he held since February 2012.
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