RBA’s Lowe: Wages growth key to whether Australia inflation rise sustained

Anil Panchal FXStreet

“The Reserve Bank of Australia (RBA) is closely watching a spike in inflation,” said the RBA Governor Philip Lowe, per Reuters, while speaking at a conference hosted by the Universidad de Chile on early Friday morning in Asia.

The policymaker adds that he did not think the rise would be sustained unless it led to sustainably higher wages growth.

Key quotes

Policymakers broadly understood why the spike in inflation was occurring.

Whether it turned into a permanent lift depended on whether it fed through to the labor market.

Is it going to reset expectations about what type of wage growth people should get, or will the spike dissipate and we will go back to the type of labor market outcomes we’ve seen before the pandemic?

So there is quite a lot of uncertainty around that issue, but we are watching very carefully.

Read: AUD/USD: Bear’s return eyes 0.7420 amid inflation-linked fears, China woes

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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