Fear of inflation is probably behind the Reserve Bank's decision to reduce economic stimulus
Fear of inflation is probably behind the Reserve Bank's decision to reduce economic stimulus
15 July 2021
The bank's stopped short of increasing the Official Cash Rate, but will be ending its 'money printing' or bond buying programme earlier than expected.
JMI Wealth director, Andrew Kelleher, says the central bank says if the settings are left as they are, there's a risk inflation could overshoot the target in the medium term.
He says they reiterated there'll be inflation spikes in the June and September quarters.
Kelleher says that's expected to be temporary, but more persistent inflation is expected to build over time.
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