RBA Won’t Hesitate to Raise Rates Further, Currency Climbs

-- Australia’s central bank is “vigilant” over upside risks to inflation and won’t hesitate to raise interest rates further if needed, Governor Michele Bullock said, reinforcing her hawkish rhetoric from earlier this week.NYC Subway Riders See ‘Exceptionally High’ Air Pollution

Still, financial market pricing implies the next move is down, with traders wagering on a first rate cut in December. Bullock reiterated that given current high and sticky inflation and a still growing jobs market, “we just can’t see what it is at the moment that’s going to allow us to lower interest rates.”The RBA is lagging behind global central bank counterparts that have either begun policy easing, or plan to do so soon, as they gain control over inflation. Underlying CPI in Australia is only expected to return to the RBA’s 2-3% target in late 2025, from 3.9% in the second quarter of this year.

The governor said the rate-setting board was confident that this week’s on-hold decision would still help the RBA achieve its mandate of cooling inflation while preserving job gains.

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