PT Solid Gold Berjangka | RBA Won’t Hesitate to Raise Rates Again If Needed, Bullock Says
RBA Michele Bullock PT SGB Solid Group SG Berjangka Solid Gold Berjangka
Solid Gold Berjangka | Governor Michel Brock further emphasized his hawkish rhetoric earlier this week when he said that Australia’s central bank is “wary” of the risk of higher inflation and will not hesitate to raise interest rates further if necessary.
Speaking in his hometown of Armidale in northern New South Wales on Thursday, Governor Bullock said, “I know people don’t want to hear this. But the alternative of continued high inflation is worse. It hurts everyone.
Governor Bullock’s speech came two days after the Reserve Bank left its cash transfer rate unchanged at 4.35%, the highest level in 12 years, and revised upward its forecasts for inflation and economic growth. In his speech, the governor said that before deciding to pause, the RBA board “explicitly considered” whether another rate hike was necessary to ensure that inflation would continue to decline over a reasonable time frame.
The RBA lags behind other central banks around the world that have initiated or will soon initiate policy easing to curb inflation. Australia’s consumer price index (CPI) is expected to return to the RBA’s 2-3% target in the second half of 2025, from 3.9% in the second quarter of this year.
In his speech, Governor Bullock pointed to the growth in domestic demand to explain the high and “very sticky” service prices; the RBA expects demand growth to pick up over the next year.
The governor said, “The impact of this means that the Board’s expectations regarding when inflation will return to target have been postponed.”
He said the Rate Decision Committee is confident that this week’s decision to hold rates on hold will help the RBA achieve its mandate of keeping inflation under control while maintaining employment growth.
Australia’s more cautious policy stance has put it behind the global cycle. In June, the Bank of Canada became the first G7 central bank to begin easing. The European Central Bank and the Bank of England soon followed, and the U.S. Federal Reserve also indicated it would begin easing in September.
Financial markets put the probability of the RBA’s first rate cut in December at 80%.
Source: Bloomberg