Economics
RBA Sees Inflation Overshooting Target as ‘Acceptable Risk’
- Lowe highlights employment impact of raising rates too early
- Sees jobless rate around the low 4s-high 3s as full employment
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Reserve Bank Governor Philip Lowe said he’s prepared to tolerate inflation above the upper end of his 2-3% target range, reinforcing signals that Australia’s first interest-rate increase remains some way off.
“The approach that we are running at the moment, waiting for the evidence, does run the risk that inflation will be above 3% for a period of time and that risk is acceptable,” Lowe said in response to questions from a parliamentary panel on Friday. “We think running that risk is an appropriate thing to do.”