Familiar Tones From Lowe

Initial remarks from RBA Governor Lowe go over familiar ground, as he pointed to well-anchored inflation expectations in Australia, as well as the (thus far) resilient domestic consumer spending backdrop.

• Lowe goes on to point to the narrow path that the RBA faces re: returning inflation to target without hurting the economy “too much.” He highlights this is the first test in a world of “more variable” inflation, with central banks needing to demonstrate that this test can be passed.
• Lowe also highlighted the idea that the lagged impact of tighter monetary policy may be more elongated in the current cycle. A reminder that the lagged impact of monetary policy has been a central tenant of the RBA’s decision to step down the pace of rate hikes in recent months.