Fed:Rates rise to their highest level in over 10 years =2

AAP General News (Australia)
08-08-2007
Fed:Rates rise to their highest level in over 10 years =2

In a statement accompanying its rates decision, RBA governor Glenn Stevens said the
high outcome of the consumer price index in the June quarter indicated a "less favourable"

outcome for inflation.

He said this indicated "that any further increases in inflation would take place from
a higher starting point than previously envisaged."

"Based on these considerations, the board judged that a somewhat more restrictive monetary
policy setting was required in order to keep inflation consistent with the target in the
medium term."

Commonwealth Securities chief economist Craig James said the RBA needed to always be
forward looking.

"It no doubt believes inflation could bubble a little bit higher, and it's acted accordingly
to be able to restrain growth," Mr James told Sky News.

"We certainly believe this will be the last interest rate hike we will see this year."

AAP cb/jlw

KEYWORD: RATES RBA 2 CANBERRA

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