Australian Treasurer Jim Chalmers said on Wednesday that he expects inflation to reach its highest level in 32 years by the end of 2022, calling for more interest rates from the Reserve Bank of Australia (RBA) before Christmas.

Key quotes

‘We’ll see that later. Certainly, the expectation across the board is that inflation will get significantly higher than the 5.1 percent we saw in the March quarter.”

“Across the board, inflation is expected to worsen before it gets better, and then interest rates will rise again.”

“Obviously, as interest rates continue to climb, as directed by the Reserve Bank governor, it will become more difficult for Australians to pay off their mortgages.”

“So this is a very difficult time, and I welcome the candor and candor with which Governor Lowe has described the challenges ahead.

“This is already making life very difficult for Australians, and for Australian industry too, as prices for goods and services and supplies are skyrocketing.”

Market reaction

AUD/USD remains uninspired by the hawkish RBA rate hike expectations, as recession fears weigh heavily on the investors’ sentiment.

The pair is currently trading at 0.6937, down 0.47% on a daily basis.