RBA Governor Uncertain About Effectiveness of Rate Hikes

RBA Governor Michele Bullock spoke at an event in Sydney, focusing on the bank's efforts to combat inflation. Bullock stated that the key question is whether tightening already delivered is enough to slow inflation.

The Reserve Bank of Australia has been raising interest rates to combat rising inflation, but Bullock emphasized that it's too early to assess the full economic effects of these rate hikes. He noted that policy operates with a lag, and the full effects of this year's rate increases have yet to be felt.

Bullock also mentioned that the economy has adjusted gradually and broadly as expected, with underlying inflation having evolved as anticipated but still remaining too high. He highlighted that some further easing in growth of demand will likely be required to bring down inflation, as well as some moderation in the labor market.