Reserve Bank of Australia Deputy Governor Andrew Hauser anticipates positive developments regarding inflation but emphasises the necessity of witnessing concrete improvements first.

He pointed out that the tightness in Australia’s labour market poses challenges to inflation levels.

Hauser shared these insights alongside Assistant Governors Brad Jones and Michelle McPhee during their appearance before the Additional Budget Estimates 2024–25 Economics Legislation Committee in the Australian parliament.

Previously, Hauser addressed the topic of inflation in a Bloomberg interview.

Andrew expects better news on inflation but stresses that actual progress needs to be seen before anything changes in policy. Right now, it’s not enough to rely on expectations or assumptions.

One of the biggest concerns is how tight the labour market remains. When there aren’t enough workers for available jobs, wages go up. Higher wages can push businesses to increase prices, making inflation stubbornly high. This is what Andrew is watching closely, as it plays directly into the Reserve Bank’s decisions.

During the parliamentary session, he was joined by Brad and Michelle. These discussions in front of lawmakers give more insight into how the Reserve Bank is thinking about economic pressures and possible policy moves. They also highlight what officials see as the biggest obstacles in bringing inflation down.

Not long before this, Andrew had spoken about inflation in an interview with Bloomberg. His recent comments suggest that while he sees reasons for optimism, the path forward still requires caution. There won’t be any rapid shifts unless there is clear proof that rising prices are under control.

For those keeping a close eye on markets, this reinforces the importance of labour data. As long as employment remains strong and job vacancies stay high, there’s little reason to expect a sudden change in how rate decisions are approached. That means wage growth and hiring trends will be key in shaping expectations in the coming weeks.

Brad and Michelle’s presence in these discussions adds further weight to the message. Their input reflects a shared stance within the Reserve Bank, making it clear that no one is rushing into decisions without solid evidence. Inflation may move in the right direction, but without real signs of sustained improvement, tightening conditions could persist.

This careful, evidence-based approach signals what traders should watch in upcoming economic reports. Key wage data, employment figures, and inflation trends will determine how soon, if at all, adjustments might come. Until then, everything points to a position of patience.