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Australia's central bank chief warns inflation risks materialising
Michele Bullock said businesses are passing on higher costs and markets see a 93% chance of another rate rise this month.
- Reserve Bank Governor Michele Bullock said on Friday that upside risks to inflation are materialising, as the bank weighs whether current policy can return inflation to its 2%-3% target.
- The Middle East conflict and global AI-related boom are putting upward pressure on prices, while a tight labour market could amplify pass-through of rising input costs into consumer prices.
- Policymakers are evaluating whether three rate hikes this year from the 4.35% cash rate have sufficiently tightened policy. Bullock acknowledged housing market softening poses downside risk, though financial stability risks remain contained.
- Markets imply a 93% chance the RBA will lift rates for a fourth time this year when it meets on September 28-29. UBS chief economist George Tharenou said global central banks are clearly reacting to inflation risks.
- Analysts now expect the RBA to hike rates twice more, reaching a peak of 4.85% by early 2027. The bank continues to debate whether current policy settings are tight enough to deliver inflation back to target.
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Australia's central bank chief warns inflation risks materialising
·London, United Kingdom
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Reserve Bank of Australia’s Worst Inflation Fear Comes True
NewsFinale NewsFinale Journal Reserve Bank governor Michele Bullock says the central bank’s concerns over inflation are now being realised, raising the prospect of another increase in interest rates. Speaking at a parliamentary hearing on Friday morning, Bullock reinforced market expectations that the RBA could deliver its fourth rate rise of the year at its next board meeting in […]
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Leaning Left0Leaning Right0Center3Last UpdatedBias Distribution100% Center
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