Key facts
- RBA Governor Michele Bullock stated the central bank is monitoring economic conditions.
- The RBA is assessing the impact of higher interest rates and the global energy price shock.
- Bullock noted signs that policy tightening is working to slow demand.
- The full impact of policy tightening is expected in one to two years.
Australia's central bank is carefully monitoring economic conditions to assess how higher interest rates and the global energy price shock are playing out, according to RBA Governor Michele Bullock. Appearing before lawmakers on June 4, Bullock stated that policymakers are observing signs that policy tightening is working to slow demand. She added that it would take approximately one to two years to feel the full impact of the current monetary policy measures. The RBA's appearance comes after a period of consecutive interest rate hikes, with markets anticipating a pause in the upcoming June meeting. Bullock also noted that inflation is still too high and that the central bank will do what is necessary to achieve its mandate. She reaffirmed that monetary policy is well-placed to respond to developments after three cash rate hikes, and that the board is focused on delivering price stability and full employment. The flow of data and developments since May have not materially differed from expectations, and the RBA will carefully monitor conditions to assess the combined effect of higher rates and the energy shock.