RBA Governor Warns Australia Faces Global Inflation Threat from Rising Oil Prices
The Reserve Bank of Australia (RBA) governor Michele Bullock has warned that Australia faces global inflation threats from rising oil prices. At a House of Representatives economics committee hearing, Bullock stated that around the world, monetary policy works to lower inflation with interest rate rises.
She acknowledged that Australian mortgage holders feel interest rate hikes more keenly than those in other countries due to the country's variable rate mortgage book. However, she emphasized the need to contain inflation as price pressures from rising oil prices are now spreading through the economy.
The RBA's forecasts suggest that inflation will not return to around the midpoint of its target range until late 2027. The recent step up in the Middle East conflict has added pressure on the Australian economy, with some upside risks to inflation materializing.