Oil supply disruptions already influencing inflation expectations, says CBA chief economist

Описание: The war in the Middle East appears to have swiftly hit consumer confidence with the latest ANZ-Roy Morgan poll showing views on personal finances and the economy have deteriorated in the past week.
Some respondents gave their opinions after the Reserve Bank governor Michele Bullock expressed concern about the war influencing short-term inflation expectations.
Former deputy treasury secretary, and now Commonwealth Bank chief economist, Luke Yeaman says he believes the oil supply disruptions are already influencing consumer behaviour and having an effect on inflation expectations.
"When you have a shock of this scale, the amount of oil supplies, the amount of gas supplies that are caught up in the Strait of Hormuz and in the Middle East generally, we're seeing right around the world that consumers are trying to work out what this means for them and that they're trying to get ahead of any potential shortages," he tells The Business. "I think that's more a natural reaction rather than yet any hard evidence on the ground that we're seeing shortages".
He says in his opinion, the volatility will continue over the next couple of weeks and agrees with NAB that inflation in the second quarter could reach five per cent.

The Bank of America has now tipped the RBA will hike rates at its next meeting on March 16 and 17, but Luke Yeaman says while he agrees the meeting is live, a hike is unlikely. "There's going to be so much uncertainty sitting there when the Reserve Bank sits down next week that they're probably going to take the option to wait and see until May," he says.

In this extended interview, Mr Yeaman also details the possible impact of the Middle East war on the Treasurer Jim Chalmers' May federal budget.
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