Guy Debelle warns of 'higher for longer' rates amid energy transition
The former RBA deputy governor thinks Australia can play a big role in helping the world decarbonise, but admits it means rates will be likely be higher for longer.
Guy Debelle doesn't talk about monetary policy very often anymore. Since leaving the Reserve Bank of Australia to join Fortescue Future Industries, and then leaving FFI to join obscure small cap critical minerals miner Tivan, most of his focus has been on resources and the energy transition.
So when Debelle does mention interest rates, even briefly, it is worth sitting up and taking notice.
At the UBS investment conference this week, Debelle noted that Australia will need to make massive investments to remain competitive with other countries in the energy transition such as the US, which is spending USD350 billion over the next decade under the Inflation Reduction Ac (a figure Debelle thinks might actually top USD1 trillion).
"What we're discussing here is sustained capex, in a scale, we've not seen or experienced outside of wartime," he told the conference. "I think that that's another reason why rates are gonna be higher for longer."
