RBA Warns: Slowing Employment Growth Crucial to Taming Inflation Risks

Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser emphasized that employment growth needs to slow down further to control inflation. Speaking in Brisbane, Hauser stated that key risks for higher inflation include the ongoing war in Iran and significant investments in artificial intelligence infrastructure.

The RBA will not hesitate to raise interest rates if these inflation risks materialize. The government has acknowledged rising costs are eating into wage gains.

Hauser highlighted stagnant productivity growth in Australia as another concern for inflation. While no specific target or timeline was mentioned, the implication is that employment growth must be managed carefully to prevent higher inflation.