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(Bloomberg) — Australia’s central bank can and will bring down inflation, Deputy Governor Andrew Hauser said on Friday, warning that unchecked price increases are “toxic” and pointing out they have caused wars in past eras.

Hauser, speaking at an economic conference in Sydney, reaffirmed that the battle against sticky prices is still not over and will be fought to the end. In his first public appearance since joining the Reserve Bank earlier this year, he charmed the audience and elicited laughter with jibes over “gotcha” questions from the host and the advantages of living in Australia compared with the UK.

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Still, it was the subject of consumer prices that prompted the former Bank of England assistant governor to turn more serious. 

“The most important communication that we can give” to the Australian people “is that we can and will get inflation back to a stable and low level,” he said. “Inflation is the thing that our job is to take off the table.”

His message follows hawkish rhetoric on inflation from Governor Michele Bullock two days ago and reinforces the view that the RBA is likely to lag global counterparts in policy easing. Both the European Central Bank and Bank of Canada lowered interest rates this week.

The RBA’s No. 2 official pushed back against the suggestion on Friday that Australia is out of sequence with overseas monetary bodies. 

He highlighted that Canada’s interest rates were higher than Australia’s and its inflation rate was lower. Europe, meanwhile, has had a persistent lack of growth, he noted. ECB officials “are not at all sure where rates are going next” from here, though they were keen to begin the rate-cutting cycle, Hauser said.

Economists expect a first RBA cut late this year while market pricing implies an easing cycle will start around mid-2025. 

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The RBA raised rates 13 times between May 2022 and November 2023 to 4.35%, a 12-year high, in its most aggressive tightening campaign in a generation. 

Hauser described inflation as “incredibly toxic” during the fireside chat. “Without wishing to be hyperbolic, it’s caused wars, it’s caused genuine breakdown in societies, it’s the most unfair form of economic development.”

Data released this week showed Australia’s A$2.3 trillion ($1.5 trillion) economy all-but stalled in the first three months of the year while the annual result was the weakest, outside the pandemic, since early 1992. Separate figures in recent weeks showed Australia’s disinflation trend may be in doubt — first-quarter CPI came in hotter than expected while price gains quickened in April to 3.6%. 

Some economists, including former RBA Assistant Governor Luci Ellis, see a stagflation scenario as quite plausible. Still, at 4.1%, Australia’s jobless rate remains below the RBA’s assessment of full employment. 

The rate-setting board next meets on June 17-18 when no change in policy is expected. Ahead of that, policymakers will get a chance to see another round of labor market data next week with economists predicting unemployment will tick lower to 4% as solid hiring persists.

Hauser’s appointment as deputy governor was a part of a move to overhaul Australia’s central bank and its culture by installing someone from an offshore institution. The RBA has historically promoted internally and has been criticized for being overly insular and lapsing into group think.

Su-Lin Ong, chief economist for Australia at Royal Bank of Canada, was impressed with Hauser’s delivery during the fireside chat.

“He’s energetic, passionate about what he is talking about, thoughtful in his answers,” she said. “He also brings that much needed global perspective.”

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