New Reserve Bank of Australia (RBA) governor, Michele Bullock, has held rates at 4.1 per cent.
Rates were previously held at 4.1 per cent in Philip Lowe’s final meeting on 3 September and have been left unchanged for the last three months as a way for the central bank to ascertain the impact of previous rises on the market.
Since May 2022, interest rates have risen by 4 percentage points.
In a statement, Bullock said: “The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. In light of this and the uncertainty surrounding the economic outlook, the board again decided to hold interest rates steady this month. This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook.
“Inflation in Australia has passed its peak but is still too high and will remain so for some time yet.
“The recent data are consistent with inflation returning to the 2–3 per cent target range over the forecast period and with output and employment continuing to grow. Inflation is coming down, the labour market remains strong and the economy is operating at a high level of capacity utilisation, although growth has slowed.
“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks.”
This week’s meeting is the first to be led by Bullock who took over the role of governor from Lowe on 18 September. A deputy governor to replace her previous role is due to be appointed in due course.
She is the first female governor in the RBA’ history and was appointed by Prime Minister Anthony Albanese in July.
Treasurer Jim Chalmers noted she will now be involved in implementing the changes to the bank following its independent review.
He said: “Michele Bullock has made it very clear to us that part of her role is to make sure that we can implement, in the best possible way, the recommendations of the Reserve Bank Review. We’ve had a number of conversations about that and I know that [she] is committed to the review process, as am I.
“She brings that experience and expertise but also that heft and gravitas which will actually be a really important asset when it comes to a relationship with the various RBA boards and in implementing the review. She has the best combination of attributes to help us do that.”
There will be no more rate rises. That was determined when the Labor Party put her in the job. As the next election gets closer the rate will start dropping. It will only go up again next time Liberals are in power. The RBA is completely under Labor Party control now. If the proposed changes to RBA governance get in then the Labor Party will control the RBA forever!