RBA Gov. Lowe says inflation is too high

Reserve Bank of Australia Governor Lowe is giving testimony in parliament.

From his prepared remarks (Headlines via Reuters):

• Now that 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 is as high as it is, we need to make sure that inflation returns to target in a reasonable time
• Inflation has very quickly gone from being too low, to being too high
• RBA is committed to returning inflation to the 2 to 3 per cent target range over time.
• RBA will do what is necessary to make sure that higher inflation does not become entrenched
• Seeking to do this in a way that keeps the economy on an even keel.
• Medium-term inflation expectations have remained well anchored
• Growth in labour costs remains consistent with inflation returning to target.
• It is understandable that some people are questioning whether or not too much support was provided by the RBA over the past two years
• Board expects that further increases will be required to bring inflation back to target. We are not on a pre-set path
• At some point, it will be appropriate to slow the rate of increase in interest rates
• Case for doing that becomes stronger as the level of interest rates increases.
• RBA board judged during peak of covid pandemic that the bigger policy mistake would have been to do too little, rather than too much
• Board and the bank's staff welcome rba review and we have already had constructive discussions with the review panel

Full text:

Opening Statement to the House of Representatives Standing Committee on Economics

There will be an extended Q&A to follow

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On these comments there is something for those forecasting a 50bp rate hikes at the next RBA meeting (October 4), and something for those forecast 25bp instead.

Lowe talking tough on the fight against inflation (the case for +50bp), for example:

• Inflation has very quickly gone from being too low, to being too high

• RBA is committed to returning inflation to the 2 to 3 per cent target range over time.

• RBA will do what is necessary to make sure that higher inflation does not become entrenched

And for the +25bp side of the argument:

So, what will it be? I'm a gonna wait until the Q&A, to see if there is more of pertinence before drawing conclusions.