RBA Gov. Lowe says inflation heading as high as 7% ... going to have to increase rates

More from Lowe:

• govt review is an entirely appropriate thing to do
• flexible inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term target is widely accepted as right framework
• household spending is still pretty strong, even if they are cautious
• labour market is an incredibly positive story, past point of full employment
• going to have to increase rates with inflation heading to 6% or 7%
• assume at some point rates will eventually get to 2.5% neutral level
• steady rate increases now needed to restrain inflation

I bolded the pertinent remarks.

I guess even more pertinent is that given the CPI is going to 6 to 7 why is the cash rate at 1.35% at present? Why is the RBA fiddling about?

Where we are at: