RBA Deputy Governor Andrew Hauser states that the future path of interest rates remains uncertain.

One of Australia’s most influential central bankers has cautioned against listening to “false prophets” who claim to predict the future direction of markets and interest rates.

In a speech to the Economic Society of Australia in Brisbane on Monday, Reserve Bank of Australia Deputy Governor Andrew Hauser warned that the modern tendency to express “certainty” about monetary policy, which determines interest rates across the economy, is a “dangerous game” that could negatively impact the welfare of all Australians.

“It is right to expect confidence that the central bank will bring inflation back to target and maintain full employment: that is the RBA’s mandate, and we should be held accountable for it,” he said.

“But the policy strategy needed to achieve that outcome, and the economic judgments behind it, cannot be expressed with the same level of certainty. Those who suggest otherwise are false prophets.”

To emphasize the profound uncertainty present in all aspects of life, Mr. Hauser referenced a study of professionals across various industries who were asked difficult but factual questions with clear answers, revealing a high “miss rate” due to their overly narrow range of uncertainty.