Video courtesy by Reserve Bank of Australia
Reserve Bank Governor Michelle Bullock warned Tuesday that inflation may prove more persistent than forecast while holding interest rates at 3.60%, repeatedly declining to signal whether Australians will see further cuts to borrowing costs this year. The governor said recent data suggest upward pressure on prices beyond the bank’s August expectations, particularly in market services and housing costs, though she emphasized both headline and underlying inflation remain within the 2-3% target range. Bullock told reporters she won’t predict the next three to six months of rate movements, saying the board will make decisions “meeting by meeting based on the data” when it reconvenes in November with updated inflation figures and economic forecasts.
The governor welcomed signs that household consumption is recovering as real incomes and wealth rise, calling it “good news” that reflects improved consumer confidence, but cautioned the bank must ensure demand doesn’t outpace the economy’s supply capacity. Bullock acknowledged Australia’s housing affordability crisis when pressed by reporters about families priced out of homeownership, but said the central bank cannot target property prices and identified structural supply deficits as the core problem. She expressed skepticism that government housing initiatives will deliver meaningful relief within two years, saying her focus remains on keeping inflation stable and employment strong to give Australians the best opportunity to enter the market.
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