Australian central bank chief signals pause after split decision on latest rate hike
Fifth rounds of tightening this year have yet to feed through to the economy, she says.
Australia's central bank governor, Michele Bullock, has signaled a wait-and-see approach after the Reserve Bank of Australia (RBA) made a split decision to raise the benchmark rate to an 18-year high. The decision, which was made after a 6-3 vote in favor of the rate hike, caused the currency to fall against the US dollar. At a press conference in Sydney, Bullock emphasized that the impact of the latest rate increases has yet to be felt, stating that "the last couple haven't even started to flow through yet."
She also highlighted that tighter policy is already weighing on demand, which is starting to slow relative to supply. While Bullock remained tough on inflation, she noted that the dissenters on the board had put greater emphasis on downside risks in the economy. Analysts interpreted Bullock's remarks as dovish, with the currency falling against the greenback as traders reduced the odds of the RBA raising the cash rate to 5.1% in 2027 from almost 50% by next May.
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