The RBA official confirmed that strong demand still allows companies to increase rates, with RBA assistant governor Marion Koehler speaking at a conference on the Australian economy outlook and saying:
- Lower inflation would be more gradual than previously thought
- The process of bringing inflation back to target is likely to take longer
- Still strong demand levels allowed companies to pass on cost increases
- Wage growth has rebounded, but now appears to have stabilized broadly
- Key risks are the possibility that today's high inflation could fuel inflation expectations
- It's encouraging that medium-term inflation forecast metrics are in line with the target
- Labour market conditions are improving, but still tight
