Bullock Downplays August CPI's Impact on Future Rate Hikes

RBA Governor Michele Bullock downplayed the significance of tomorrow's August Consumer Price Index (CPI) report, warning against overemphasizing its impact on future interest rate decisions.

Bullock emphasized that the full effect of previous rate hikes can take up to 18 months to be felt in the economy and that a single month's data should not dictate policy decisions. The RBA has already raised interest rates three times since February, with today's hike still being felt.

The Governor acknowledged that a hot CPI print could lift the Australian dollar and lead traders to price in another rate hike, but stressed that it would be a confirmation of current inflation trends rather than a signal for future policy moves. The odds of another 25bps rate hike at the November meeting currently stand at around 41%.