Reserve Bank of Australia Deputy Governor Andrew Hauser stated on Wednesday that tighter monetary policy is effectively slowing the economy, but the inflation outlook has deteriorated. Speaking at a Citi conference, Hauser noted that while the bank’s economists were finalizing their forecasts, the inflation outlook appeared “materially worse.” He attributed this partly to elevated oil prices.
Hauser emphasized that monetary policy cannot directly address an oil shock but must ensure that higher costs do not translate into rising inflation. He expressed uncertainty about whether further interest rate hikes would be necessary, reflecting the challenging balance between economic cooling and inflation control.