RBA Governor Warns of Supply Shock Challenges Ahead of Rate Decision

RBA Governor Bullock emphasized the challenges posed by supply shocks for monetary policy during her recent fireside chat in Sydney. The event marks her last scheduled appearance before the RBA's decision next week, and any shift in tone could impact the Australian dollar.

Bullock noted that higher unemployment rates between 4.5% and 5.0% could ease pressure on inflation. She also highlighted how rising neutral rates globally are pushing up real bond yields.

The Governor's comments come as Australia's four major banks now expect a 25 bp hike following her recent hawkish remarks. The Australian dollar mirrors commodities and interest rate gaps, according to Bullock.