Australia’s Reserve Bank Deputy Governor Andrew Hauser emphasizes that interest rates will remain high as the RBA prioritizes employment over aggressive inflation control. With a steady cash rate of 4.35%, recent strong job growth indicates a unique approach to economic stability.
In a recent discussion at the CBA Global Market Conference in Sydney, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser made it clear that Australian homeowners shouldn’t expect any immediate relief from high interest rates.
With the RBA keeping the cash rate steady at 4.35% for the past 11 months, Hauser emphasized a commitment to maintaining a lower unemployment rate over aggressively tackling the cost of living crisis.
Hauser explained that the RBA is balancing two crucial mandates: ensuring price stability, aiming for inflation between 2% and 3%, and supporting full employment.
“It was a deliberate choice for us to not tighten as much to protect employment gains,” he stated. This approach, he noted, means inflation may take longer to return to target levels and that rate cuts might not happen as swiftly as they have in other countries.
The RBA has faced criticism for this strategy, particularly as the cost of living continues to squeeze many Australians. However, Hauser highlighted the recent strong job market as a positive sign, citing a surprising addition of 64,100 jobs in September. This surge has led to a slight decrease in unemployment and a record participation rate of 67.2%.
“We have taken a unique path in our approach to fighting inflation,” Hauser remarked, stressing that the RBA won’t simply follow the lead of other central banks, like the US Federal Reserve or the Bank of England. “The reason we are not cutting rates at the moment is because inflation is still too high,” he added.
As Australians brace for the ongoing impact of higher interest rates, Hauser’s remarks serve as a reminder that the RBA is prioritizing employment stability over quick fixes to inflation. For many, this may mean navigating a longer period of elevated rates before any potential relief comes into view.
