Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser warned on Wednesday that the inflation outlook is deteriorating, appearing worse than previous forecasts and slightly above expectations. Hauser emphasized that the RBA is still finalizing its forecasts and remains uncertain about upcoming board decisions. He highlighted that companies are increasingly citing cost pressures as their top concern, while inflation has remained elevated for an extended period.
Hauser noted some easing in job data and housing, though unemployment remains low. He acknowledged that while monetary policy has been effective, the inflation outlook continues to worsen. He stressed the need to respond to supply shocks to maintain anchored inflation expectations. The quarterly trimmed mean inflation measure is likely to exceed expectations, he added.
Hauser also pointed out that capacity constraints are more intense than anticipated, and the September labor report was somewhat weaker than expected. Despite these challenges, the Australian Dollar (AUD) is holding steady, with the AUD/USD pair trading near 0.7009, up 0.45% on the day.