RBA Governor Lowe’s Testimony: High inflation is damaging and corrosive

Will do what is necessary to make sure that inflation returns to the target range.

It would be dangerous, indeed, not to contain and reverse this period of high inflation.

Based on the currently available information, the board expects that further increases will be needed over the months ahead.

How much further interest rates need to increase will depend on developments in the global economy, how household spending evolves and the outlook for inflation and the labour market.

Path here is a narrow one.

It is important that people expect that the high inflation is only temporary.

One is the risk of not doing enough, which would result in high inflation persisting and then later proving very costly to get down. The other is the risk that we move too fast, or too far.

Inflation expectations remain well anchored and aggregate wage outcomes are not inconsistent with inflation returning to target.

It is still possible for us here in Australia to navigate this path.

But it is also possible that we are knocked off that narrow path.

Very conscious that the impact of higher rates is being felt very unevenly across the community.