Odds of fifth interest rate hike this year likely to shorten as RBA deputy warns inflation outlook ‘worsening’

The Reserve Bank’s deputy governor has signaled the central bank may need to raise interest rates further, describing the economic outlook as more challenging than previously anticipated. Speaking at a Sydney conference, he highlighted the difficulty of balancing persistent inflation pressures with the need to support a weakening economy. Concerns are growing that public confidence in the central bank’s ability to control inflation could be slipping, adding urgency to its policy decisions. The comments come as the bank weighs whether another rate hike is necessary to meet its inflation target.

Andrew Hauser says central bank faces ‘hard choices’ as it looks to balance risks of entrenched inflation with desire to protect labour marketGet our breaking news email, free app or daily news podcastAndrew Hauser, the Reserve Bank’s deputy governor, has reignited talk of a fifth interest rate hike on Melbourne Cup day, warning of “hard choices” ahead in response to an inflation outlook that “looks materially worse” than the central bank had expected two months ago.Hauser, speaking at an investment bank conference in Sydney on Wednesday morning, said the RBA monetary policy board members were juggling a slowing economy with fears that Australians were starting to lose faith in the central bank’s ability to bring inflation back to the 2.5% target. Continue reading...