Reserve Bank of Australia (RBA) Governor Michele Bullock said on Tuesday that inflation would be the main challenge for the economy over the next two years.
“Underlying demand was supporting part of the inflation challenge and it was not entirely a supply-driven issue.”
“He says inflation is a major challenge over the next year or two.”
“He’s saying that inflation isn’t just about supply and gas and rent issues, that it’s still there and there’s underlying demand.”
“If inflation expectations adjust higher in response, that’s a problem.”
“We haven’t seen any productivity growth in Australia for several years now.”
At press time, AUD/USD the pair is losing 0.04% for the day and is trading at 0.6558.