RBA governor Phil Lowe may only have a few more opportunities to fire the interest rate gun at inflation.Credit:Alex Ellinghausen
But whether a gust of wind could topple Australia off the narrow path that the Reserve Bank of Australia is walking between raising rates and avoiding an economic contraction is now in sharper focus.
At this point,we are certainly flirting with recession.
The softening in the economy has been evident all year,as has the fact that inflation has peaked and is abating.
But inflation is not falling precipitously enough for the RBA,which made it clear that it will remain zealous until the inflation genie is safely back in its bottle.
Meanwhile,RBA governorPhilip Lowe’s chances of retaining his job beyond September are worse than the aforementioned odds of a recession.
This gives him only a few more opportunities to fire the interest rate gun at inflation before he leaves his post – and he will want to make them count.