Reserve Bank of Australia deputy governor Andrew Hauser says both the economy and inflation are running stronger than expected, forcing the central bank board to weigh whether a further rate rise is needed when it meets later this month, in remarks likely to bolster expectations for another hike.
In a rare television interview, Hauser said he was more worried about the upside risks to inflation following a recent trip to Texas, where he experienced first-hand a boom in artificial intelligence, which he said was boosting productivity but also adding to inflation through the data centre rollout.
He said there was a lot to like about the Australian economy – including unemployment near historic lows and GDP growing roughly at trend – but added: “we have one big problem and that’s inflation”.
“Inflation is too high, and that’s why we raised interest rates three times at the beginning of this year. And the question now, frankly, for us, is have we done enough or is more needed,” Hauser said on the ABC’s 7.30 program on Tuesday.
“We’ve had an inflation number actually a couple of weeks ago, and it was a little stronger than we’d expected and the market expected. And the [GDP] growth numbers that came out last week were also a bit stronger. So both of those are going to be in the mix.”
Source: https://ppam.com.au/wp-admin/post-new.php?post_type=post