RBA Governor Bullock Signals Readiness to Act on Inflation Pressures
Reserve Bank of Australia Governor Michele Bullock has put markets on alert with a clear warning: the central bank stands ready to tighten policy further if inflationary pressures reaccelerate. Speaking at a parliamentary hearing in Canberra, Bullock emphasized the board's vigilance as it awaits key inflation data in coming months.
Three-year government bond yields spiked following Bullock's remarks, reflecting heightened expectations for monetary tightening. Traders now price a 50% chance of an August 2024 rate hike - a significant shift from November's forecasts.
The governor's hawkish tone underscores the delicate balance facing policymakers. While hoping for inflation to moderate, Bullock acknowledged the real possibility of persistent demand pressures. "The board WOULD take the necessary action" if price growth fails to ease, she stated unequivocally.
