The president of the Central Bank of Australia (RBA), Michelle Bullock, warned this Thursday, the 8th, that the institution may still need to raise interest rates, as inflation risks remain more than two years after monetary policy begins to take effect in the country. Bullock said that inflation is lower than a year ago but remains “too high”.
“The board is alert to the risks of rising inflation and will not hesitate to raise rates if necessary. I know people don’t want to hear this. But the alternative of persistently high inflation is worse. It hurts everyone,” the leader said.
Bullock made the comments a few days after the RBA maintained the interest rate at 4.35% per annum at the beginning of the week. The head of the RBA said at the time that there was no short-term reduction in the plans, which surprised many analysts.
“Inflation in the prices of many goods has fallen, but inflation in the prices of services remains high and is proving to be very sticky,” Bullock said on Thursday. Another concern, according to the director, is the possibility that demand growth is expected to accelerate in 2025, which will keep inflation high for a long time.
The RBA doesn’t expect inflation to return to the 2% to 3% inflation target until the end of 2025, which is why the institution’s leaders this week “considered explicitly whether another interest rate hike was necessary,” according to Bullock. Source: Dow Jones Newswires,
