Stephen Koukoulas

So they're worried.

And you can tell from

Dr. Howser's views that the unemployment rate is going to be going up over the months ahead.

It was okay last week, but over the months ahead, as the economy slows, we're going to be getting higher unemployment.

So which of these do you choose as the RBA policy-making decision?

Do your hike rates kill inflation, but you risk grinding unemployment higher?

Or do you try to keep unemployment relatively low and allow inflation to be higher for longer?

And that's the dilemma.

But

Drilling it all down, probably another rate hike.

While it's largely priced in, while people can sort of see, oh, petrol prices are causing inflation, I can understand why they're hiking.

I don't like it, but I can understand why it's happening.

And I think that's what they'll do.

And then my hunch would be they would then pause because policy then would be very tight.

4.35% cash rate, which assumes a 25-point hike in early May.

would have monetary policy restrictive unambiguously.

So they probably want to just sit tight, see the effect of the three rate hikes it would be, see the effects of oil and the global economic conditions.

No, the Aussie dollar is influenced by a myriad of things, and it can be this one that we economists are so bad at grappling with, confidence.

uh and you know the safe haven if you like and particularly we've got these global ructions going on right now uh but the aussie dollar is driven by a whole bunch of things with different weighting according to what is i'll call topical or fashionable yeah sometimes it's commodity prices right now you know we're talking about oil being you know close to 95 100 us dollars a barrel but look at copper prices the iron ore price has been resilient start coal price

sort of seen in some parts of the world as a substitute for oil its price has done done very well over the last little while so that tends to be a driver of the Aussie dollar at the moment they're up um