Bullock Hints at Rate Hike Reprieve Amid Slowing Inflation
Reserve Bank governor Michele Bullock hinted that borrowers may avoid another painful rate hike as inflation data shows signs of slowing down. The bank's preferred trimmed mean measure is expected to climb to 3.7% in the June quarter, but this could be enough to dash hopes for a further rate increase.
Bullock said that higher interest rates are indeed slowing the economy down as intended, and that growth in demand is already starting to slow down. This is part of the plan, she explained, as interest rates are designed to slow down demand to make it more in line with supply.
Analysts expect the inflation data to be released by the Australian Bureau of Statistics on Wednesday, which could influence the Reserve Bank's decision on whether to raise interest rates further. The bank has been concerned about above-target inflation for several years, and Bullock said that the longer it remains above target, the more concerned the board becomes.