Hauser made the comments in the Sir Leslie Melville Lecture at the Australian National University on Thursday evening, two days after the RBA's Monetary Policy Board lifted interest rates to 4.85 per cent, its highest level in 18 years.
The RBA's Community Research Survey, begun in February last year, has surveyed 12,000 Australians across four waves, the latest in September. It found around 55 per cent of respondents have "high" or "moderately high" overall trust in the RBA, a measure Hauser described as broadly stable or slightly up over the past 18 months -- a "surprising result" given rising interest rates and high inflation.
However, trust in the near-term ability to achieve objectives, looking one year back and one year forward, has fallen materially. Regression analysis showed these outcome measures play a statistically significant role in explaining overall trust, Hauser said.
"Not all the news is bad," he said. "But inflation is another story. It's been above central bank targets for years. And around the world, that's causing increasing anger."
Hauser said the cumulative increase in prices since COVID has far exceeded that in any other tightening period since inflation targeting began. He said that a lower inflation rate "doesn't undo that accumulated increase" and that the increase, not just the latest rate of change, seemed to be part of what was driving public anger.
He also cited Macquarie University's Business Outlook Scenario Survey, which found more businesses becoming less certain that the inflation target will be achieved over five to 10 years. Hauser noted Australia has no reliable measure of households' longer-term expectations, but that their deep concern about inflation suggested they might feel similarly. The RBA is determined to do what is necessary to get inflation down, he said.
"The broader climate of trust towards public bodies has deteriorated," Hauser said. "And we've entered a VUCA (Volatile, Uncertain, Complex and Ambiguous) world, amid a fusillade of shocks from tariffs, wars, geopolitical tensions, pandemics, and technological and environmental change. That means inflation is more likely to be pushed off target, economic forecasts are more likely to be wrong, and policy trade-offs get uglier."