On Melbourne Cup day, Andrew Hauser, the Reserve Bank of Australia’s deputy governor, warned that the odds of a fifth interest‑rate hike this year are likely to tighten as inflation looks “materially worse” than the central bank had projected two months ago.
Hauser made the comments at an investment‑bank conference in Sydney on Wednesday morning, where he said the RBA’s monetary‑policy board is facing a “hard choice” between a slowing economy and the risk that Australians are beginning to doubt the bank’s ability to bring inflation back to its 2.5 % target.
He noted that the inflation outlook has deteriorated, prompting the RBA to consider further tightening of policy. The bank has already implemented several rate increases this year, and a fifth move would signal a continued effort to curb price growth.
While Hauser did not specify a date for a potential hike, he emphasized that the RBA must balance the need to protect the labour market against the risk of entrenched inflation. The central bank’s decisions will be closely watched by markets and households alike.
As the Australian economy slows, the RBA’s policy board will need to weigh the implications of further rate rises against the broader economic environment, according to Hauser’s remarks.
<small>Source: The Guardian — read the original story there.</small>
