The head of the Reserve Bank of Australia (RBA) reiterated on Wednesday that interest rates had not peaked, adding that he was unsure how high they had to go as the central bank, seeking to control inflation, tried to follow a narrow path to a soft landing.
Getting there, and avoiding a recession, depended on moderation in wage rises, RBA Governor Philip Lowe told members of parliament.
Despite a series of interest rate rises that began in May, consumer price inflation hit a 32-year high in the fourth quarter.
“Inflation at the moment, 7.8%, is way too high. It needs to come down. That’s our primary consideration,” Lowe said.
When asked about how far interest rates would have to rise, he said policymakers had an open mind.
“I don’t think we’re at the peak yet but how far we have to go up I don’t know,” he said, adding that the central bank would keep monitoring inflation, consumer spending, the global economy and wages growth.
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