Australia's central bank monitoring impact of higher rates, energy price shock
Australia's central bank monitoring impact of higher rates, energy price shock
ReutersThu, June 4, 2026 at 5:36 AM UTC
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Governor of the Reserve Bank of Australia Michele Bullock speaks during a press conference, in Sydney, Australia, March 17, 2026. REUTERS/Hollie Adams
SYDNEY, June 4 (Reuters) - Australia's central bank is closely monitoring economic conditions to assess how higher interest rates and the global energy price shock are playing out, its top central banker said on Thursday.
Appearing before lawmakers, Reserve Bank of Australia Governor Michele Bullock said policymakers were seeing signs that policy tightening was working as intended; for example, prices in the housing market have fallen.
"Having said that, the recent increases in interest rates will have no impact on the increase in inflation already in train following increases in the prices of oil and related commodities," Bullock said.
Bullock added there were some tentative signs that higher fuel-related costs may have been passed through to the cost of other goods and services, including new-dwelling costs.
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Consumer inflation came in at 4.2% in April, well above the RBA's target band of 2% to 3%. The economy also slowed sharply in the first quarter. Household consumption unexpectedly fell in April and the unemployment rate ticked up to a 4-1/2-year high of 4.5%.
The RBA has raised interest rates three times this year to 4.35% to head off a global energy shock, fully reversing the amount of policy easing that was implemented last year. It now sees monetary policy as well-placed to respond to overseas developments.
Swap markets currently imply a 7% chance of a fourth rate hike from the RBA this month, while a move in August is seen as a coin toss. For the rest of the year, there is a total of 23 basis points of tightening priced in.
(Reporting by Stella Qiu; Editing by Himani Sarkar and Thomas Derpinghaus)
Source: “AOL Money”
