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Keep the faith or run the risk of return to high inflation
Australia could be heading back to the runaway inflation of the 1970s and 1980s if people lose faith in the Reserve Bank, a top central bank official said. Speaking to a panel of economists during the International Monetary Fund spring meetings in Washington DC, Reserve Bank of Australia chief economist Sarah Hunter said managing inflation expectations had to be the bank’s “North Star” as it responds to the Iran war shock. The RBA had managed to get inflation down post-COVID while keeping unemployment low only because inflation expectations remained anchored. Even t
