Bullock Warns Inflation Risks Materializing in Australia
RBA Governor Michele Bullock has warned that inflation risks may be materializing in Australia's economy, citing persistently elevated energy costs and ongoing excess demand. This reinforces market expectations for a rate hike possibly as early as next week.
Bullock emphasized the upside inflation risks during remarks at a business luncheon, noting that an unemployment rate between 4.5% and 5.0% might assist in curbing inflation. This implies that some increase from the present 4.5% level could be necessary to control inflation.
The RBA's policy board is set to convene on September 29, with markets factoring in a 95% probability of a rate hike to 4.60%. The current cash rate stands at 4.35%, and core inflation remains at 3.6%, significantly above the RBA's target band of 2% to 3%.