The deputy governor of the Reserve Bank of Australia (RBA), Michele Bullock, said on Wednesday that there are “good reasons to think that we are approaching the peak of inflation in this cycle“.
reiterates that further rate hikes will be necessary of interest.
The magnitude and timing of rate hikes will depend on the data.
Inflation is too high, getting wider.
Must monitor the inflationary impact of rising electricity prices and rents.
Electricity will add 1 point to the CPI in the year to the third quarter of 2023, and 0.5 point in 2024.
The rent inflation will increase in the coming quarterssince vacancies are scarce.
Wage growth is a bit stronger than we thought three months ago.
Aggregate wage growth is moderate so far, consistent with the inflation target.
There’s a lot uncertainties about the behavior of households and companies.
Global economic risks remain to the downside, especially for China.
Source: Fx Street