JPMorgan: RBA’s Lowe will stress uncertainty, policy lags

RBA President Lowe will speak on price stability, supply and economic prosperity on Tuesday, JPMorgan economist Ben Jarman said. While inflation will be the focus of Lowe’s speech, it is also expected to underscore the importance of policy lag and uncertainty over how the rate hikes already implemented will affect the economy.

Australian data has been upbeat since the most recent communication with the market, with wage growth accelerating to 3.1 per cent year-on-year and unemployment falling to 3.4 per cent. Overall, the figures were slightly better than the RBA had expected, but still not enough for Lowe to take a more hawkish stance, Jarman added.