Dr Philip Lowe’s brutal message for those struggling with rising interest rates – as he warns there will be even more pain on the horizon for homeowners and renters
- Reserve Bank boss hinted at more rate rises
Reserve Bank Governor Philip Lowe has hinted more interest rate rises are on the way – declaring it was ‘premature’ to be talking about rate cuts.
Interest rates were kept on hold at an 11-year high of 3.6 per cent on Tuesday, marking the first pause since April 2022.
The futures markets is expecting no more rate rises during this monetary policy tightening cycle, and even cuts in late 2023.
But Dr Lowe said interest rates would stay at the highest levels since mid-2012 if inflation stayed above the two to three per cent target.
‘If they need to be, they will be,’ he told the National Press Club in Sydney.
Reserve Bank Governor Philip Lowe has hinted more interest rate rises are on the way – declaring it was ‘premature’ to be talking about rate cuts.
The RBA chief also said it was too soon to be talking about rate cuts.
‘I do think it’s premature to be talking about interest rate cuts,’ he said.
The RBA’s 10 consecutive monthly rate increases have marked the most aggressive pace of monetary policy tightening since the era of a target cash rate began in 1990.
Inflation in 2022 hit a 32-year high of 7.8 per cent but in February, the monthly reading moderated to 6.8 per cent.
But the Reserve Bank is expecting it to remain above the two to three per cent target until mid-2025.
Dr Lowe said hiking rates even more aggressively to return to the a year earlier in 2024 would cause unemployment to rise.