RBA’s Lowe: Decision to hold rates steady does not imply interest rate rises are over

Reserve Bank of Australia Governor Philip Lowe is speaking on the topic titled ‘Monetary Policy, Demand and Supply’ at the National Press Club, in Sydney, on Wednesday. Audience questions are expected.

Key quotes

Decision to hold rates steady does not imply interest rate rises are over

Board expects that some further tightening of monetary policy may well be needed

Prudent to hold rates steady this month to allow more time to assess impact of past increases

At our next meeting, we will again review the setting of monetary policy and updated forecasts

Board is conscious monetary policy operates with a lag, of economic uncertainties

Pause is consistent with our practice in earlier rate cycles

Was common to move rates multiple times, then wait for a while and move again if necessary

Increasingly clear higher interest rates are having an impact on household spending

Wage outcomes have been consistent with inflation returning to target

Recent high inflation has not been driven by excessive wages growth

Inflation has not been driven by ever-widening profit margins

While supply-side factors are influencing how fast inflation declines, they cannot be a reason to tolerate higher inflation on an ongoing basis

Banking stress is another headwind for the global economy