Reserve Bank governor Philip Lowe says he’s painfully aware of what interest rates are doing to the community, but the clock is ticking on slaying inflation.
It’s a measure of just how seriously the impact of interest rates is hitting the community that Reserve Bank governor Philip Lowe will meet in the next month with suicide prevention agencies and mental health charity Lifeline.told The Australian Financial Review Business Summit in Sydney on Wednesday
Which might be why the governor also used his speech and question-and-answer session to try and give those feeling the pinch a bit of hope.with monetary policy now in restrictive territory. “When we’ve discussed the case for being even more aggressive with interest rates and trying to get inflation back to 3 per cent before the end of 2025, it would be possible to do that, but it would come at the cost of forgoing many of those gains in the labour force.
“So, [chairman] Powell, if you could speak directly to the two million hard-working people who have decent jobs today, who you’re planning to get fired over the next year, what would you say to them?” she asked. “How would you explain your view that they need to lose their jobs?”“All of them, not just two million of them, but all of them are suffering under high inflation, and we are taking the only measures we have to bring inflation down,” he said.
Traders also pushed pricing for the Fed’s terminal rate to 5.65 per cent, up a staggering 300 basis points from where it sat less than 12 months ago. The US two-year treasury jumped above 5 per cent for the first time since June 2007, although the long end of the yield curve was largely unmoved.P 500 fell more than 1.
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