Glenn Stevens is to appear before the federal economics committee on Wednesday and is likely to face questions on the fallout over the budget impasse.
Glenn Stevens usually tries to avoid commenting directly on government policy and the workings of parliament.
But the governor of the Reserve Bank of Australia (RBA) is likely to have to field questions on the ongoing impasse over the budget when he faces a grilling from federal politicians this week.
Mr Stevens and his economics team head to Brisbane on Wednesday for their twice-yearly appearance in front of the House of Representatives economics committee.
As usual, economists and financial markets will be hanging on his every word to gauge the likely timing of any move in the official interest rate.
The cash rate has been stuck at an all-time low of 2.5 per cent since August 2013.
TD Securities head of Asia Pacific research Annette Beacher hopes the committee hearing is not “hijacked by politicians with irrelevant questions”.
She says it is crucial Mr Stevens is quizzed on housing and house prices, the high Australian dollar, the budget and whether the cash rate is appropriate when those of a number of other countries are at zero.
Commonwealth Bank of Australia (CBA) economists also want to hear the governor’s thoughts on the recent jump in the unemployment rate to a 12-year high of 6.4 per cent.
The central bank’s quarterly statement on monetary policy released earlier in August says a sustained decline in the jobless rate is not expected until 2016.
CBA economists believe this is “overly pessimistic”.
The quarterly statement also forecasts state and federal budget cuts could weigh on economic growth if they proceed as envisaged.
But it noted the uncertainty surrounding the extent and timing of federal fiscal consolidation.
“Different outcomes from those that have been assumed could result in consumption and public demand growth either stronger or weaker than forecasts,” the statement said.
It will be interesting to know what bearing these may have on the interest rate outlook.