On Friday, RBA Governor Michele Bullock and her new look team were questioned by the House Economics Committee in Canberra for most of the morning. And I watched it all, so you don’t have to! There was very little new at one level, because the bank had recently released its statement on monetary policy and rate `decision.
Recall that the Reserve Bank left the key rate at a 12-year high of 4.35% and maintained its hawkish rhetoric. Money markets and economists still reckon the RBA’s next move will be a cut, though they’re split on the timing. Traders are betting December will be the beginning of the easing cycle, while the consensus of economists is it will only start sometime in 2025.
It’s clear from Governor Bullocks opening statement, that Australia’s central bank remains some way off easing monetary policy because inflation is proving persistent and will only return back to the target range late next year.
“The board remains vigilant to upside risks to inflation,” Bullock said in her opening statement to a parliamentary panel in Canberra on Friday. “It is premature to be thinking about rate cuts.”
Supporting the RBA’s caution, data this week showed Australia’s labor market continued to add jobs at a solid pace while wage growth remains elevated. See my earlier show “When things don’t add up at the RBA. Separate figures pointed to a small rebound in consumer sentiment and business confidence is holding up.
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