Bullock Warns of Restrictive Conditions Amid Inflation Concerns

RBA Governor Michele Bullock has stated that current financial conditions are 'restrictive', citing ongoing inflationary pressures as a major concern. The labor market remains 'somewhat tight' and unemployment rates are at historically low levels, according to Bullock.

The RBA governor emphasized the need to curb excess demand, which is driving inflation due to pressure on domestic supply capacity. If inflation declines, additional rate hikes may not be necessary, but if it persists, the bank will raise rates again.

Bullock also addressed the impact of geopolitical risks on the economy, describing the Middle East situation as a 'major shock' that has made everyone poorer. This has led to concerns about energy prices and supply chains potentially pushing inflation higher.