⚡ RBA’s Hauser: Still have work to do to reduce inflation, which remains far too high

Australia’s central bank signaled continued hawkish policy stance Wednesday as Reserve Bank of Australia Deputy Governor Andrew Hauser declared inflation remains far too high and more work is needed to bring it under control. The comments from the senior RBA official suggest the central bank is maintaining pressure on price stability despite recent economic headwinds affecting the Australian economy.

Hauser’s remarks come as markets have been pricing in potential rate cuts from global central banks in 2024. The statement indicates the RBA may resist easing monetary policy as aggressively as other developed market central banks while inflation persists above target levels. Australian traders and investors should prepare for higher-for-longer rates, which could continue supporting the Australian dollar while pressuring equity markets and rate-sensitive sectors including property and consumer discretionary stocks.

FXnCO Insight

Australian dollar longs may find support from the RBA’s sustained hawkish tone, while investors should reduce exposure to rate-sensitive Australian equities until clearer signals emerge on the inflation trajectory.

Source: FXStreet