RBA Gov. LOWE stated that in order for demand to grow
The one-sentence summary of his speech is that LOWE sees further rate rises as still required, just at a slower than pace than we’ve had.
In order to bring supply and demand back into balance, demand must grow more slowly than it has been.
There is significant demand for higher inflation, not just from a supply perspective.
We are very aware that there are lags in monetary policy, and it is quite possible that wage growth does not pick up much further. Quantitative tightening is not on our agenda at the moment, and the neutral cash rate is at least 2.5%. We are closer now to estimates of neutral than we have been in the past.
