Reserve Bank of Australia (RBA) governor Michele Bullock is facing growing scrutiny over the effectiveness of monetary policy as inflation remains stubbornly high. According to Deloitte Access Economics, underlying inflation in Australia is expected to exceed the 2.5 per cent target for a full seven years before finally being brought under control in late 2028.
The recent press conference following September’s rate hike highlighted the mounting pressure on Bullock. When asked whether monetary policy was becoming detached from the issues it aimed to address, she acknowledged that rate increases have widespread impacts beyond mortgage holders. She noted that “the interest rate increase gets into all sorts of cracks,” indicating the broad economic effects of such measures.
The prolonged period of elevated inflation has raised questions about whether the RBA’s current tools are sufficient to tackle the underlying economic challenges. As the central bank continues to navigate this complex landscape, the focus remains on whether further adjustments will be necessary to achieve the desired inflation target.