Navigating another round of probing questions from politicians on Friday, Dr Lowe stuck to his hawkish tone since delivering the ninth interest rate hike in a row last week.
Facing intense scrutiny following some imperfectly communicated forecasts and controversial private briefings with bankers, he used his opening statement to a parliamentary committee to defend the bank's rate hiking cycle.
Dr Lowe said inflation was still "way too high" at 7.8 per cent in the December quarter.
"This is the highest rate in a number of decades and it is higher than we were expecting just a few months ago," he said.
University of Sydney economist Luke Hartigan says the RBA has tried to be aggressive to keep inflation expectations contained.
"The idea is that if people think inflation is going to become ingrained, then it will have to go higher and will have to stay there for a while," he told AAP.
During the hearing, several committee members voiced concerns higher interest rates were hitting their low-income constituents hard and
Dr Lowe and his colleagues acknowledged the unfair burden felt by households.
"We're very conscious that the impact is being felt quite unevenly across the community," he said.
The governor was also asked which socio-economic groups were primarily responsible for driving demand and subsequently inflation.
Dr Lowe said the high inflation and rising rate environment was dividing the Australian population into two groups - those with manageable mortgages and good job prospects and a second group that had high levels of debt or were paying a lot in rent.
"We've got two groups of people at the moment, at a very high level, and their spending is quite different, and this is the unevenness of monetary policy," he said.
But he painted a bleak picture if inflation stays high for a prolonged period like it did in the 1970s and 1980s.
"To get inflation back down four or five percentage points requires a steep downturn in the economy and probably a rise in unemployment of five percentage points," he warned.
Dr Hartigan agreed entrenched inflation was very costly.
"There's a part of the population that doesn't remember what it was like in the 80s and in the 70s, where you'd go down to shops and buy toilet paper in the morning because otherwise the prices would have increased in the afternoon," he said.
"It really distorts how the economy functions, if prices are rising, it means what you can buy tomorrow is less than what you can buy today."
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