RBA’s Hauser says inflation too high, vows action to return to target. AUD jumps.

Fireside chat with Andrew Hauser, Deputy Governor, at the Australian Chamber of Commerce and Industry (ACCI) Business Leaders’ Series, Sydney.

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RBA Deputy Governor Hauser warned inflation remains too high and signalled the Bank will tighten further if required to return it to target.

Earlier:

Summary:

• Hauser says inflation remains too high

• Some pressures supply-driven, may persist

• RBA prepared to tighten if needed

• Economy broader than resources sector

• Policy bias remains hawkish

Reserve Bank of Australia Deputy Governor Andrew Hauser reinforced the central bank’s tightening bias, warning that inflation remains too high and cannot be allowed to persist above target.

Speaking on Australia’s economic outlook, Hauser acknowledged that some inflationary pressures are likely to unwind naturally, particularly those linked to earlier global supply disruptions. However, he cautioned that a portion of current price pressures appears tied to domestic supply constraints, which may prove more persistent and require a firmer policy response.

Hauser emphasised that the RBA is prepared to “do what is needed” to bring inflation back within the 2–3% target band, reiterating the Board’s determination to anchor expectations and prevent high inflation from becoming entrenched. His remarks align with the RBA’s recent messaging that inflation, while easing from its peak, remains uncomfortably elevated.

The deputy governor also pushed back against the notion that Australia’s economy is narrowly dependent on the resources sector. He noted that activity across many parts of the economy remains resilient, suggesting domestic demand has held up better than some had expected despite restrictive interest rates.

The RBA lifted the cash rate to 3.85% earlier this month, citing renewed upside risks to inflation and evidence of ongoing capacity pressures. Markets currently lean toward another rate increase in coming months, with May seen as the more likely timing. A March move remains a lower-probability risk but would likely require a material upside surprise in inflation or wages data.

Hauser’s comments underscore that while some disinflation is anticipated, policymakers remain vigilant. The message is clear: inflation must return sustainably to target, and the RBA stands ready to tighten further if progress stalls.