Reserve Bank of Australia Governor Michele Bullock addressed concerns following the release of minutes from the RBA’s Nov. 7 meeting, revealing a departure from a four-meeting pause. Policymakers shifted course to ensure that inflation would track back to the coveted 2-3% target amid accelerated economic growth and a robust labor market.
The meeting minutes underscored the board’s apprehensions regarding inflation expectations. RBA staff projections hinted at the likelihood of one to two more rate hikes. Bullock emphasized the imperative nature of containing consumer prices, highlighting that even after the recent interest rate hikes, the challenge of reining in inflation persists. She shed light on the current inflation landscape, attributing it primarily to supply-driven factors like petrol prices and rents, while acknowledging an underlying demand element that demands attention from central banks.
The potential for further tightening of monetary policy to steer inflation back to its target hinges on the trajectory of incoming economic data and the evolving assessment of risks. The governor emphasized the importance of these factors in determining the path ahead for policy adjustments.
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