RBA governor Michele Bullock is appearing at Senate estimates after hotter inflation data yesterday increased the risk of a rate hike in November.
"All I was trying to convey really was the same thing we've been conveying all along, which is the longer that inflation remains outside the target band. The more likely it is that inflation expectations might adjust to that," she says.We think we can manage to slow the economy enough without actually putting it in a recession and an unnecessary increase in unemployment.
RBA governor Michele Bullock wants us to look at 'compensation' - being overall pay packets - more than just the WPI, arguing that bonuses and incentives are helping to bridge the gap."What I would say though, is that compensation, if you like, rather than a lot of people focus on on the wage price index, which is an idea of how much nominal wages are rising. And if you look at compensation, compensation that's been rising more quickly.
"The change in our call is based on the stronger Q3 CPI but also the more hawkish rhetoric that we've seen from the RBA over the past couple of weeks."even though inflation is coming down, it's not happening as fast as experts think the central bank would like.
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