In a central bank conference held in Hong Kong, RBA Governor Michele Bullock said that monetary policy is currently restrictive, a necessary stance to moderate demand and anchor inflation expectations.
Bullock highlighted the need to be “a little bit careful,” in this period, aiming to control inflation and bring it back within target range of 2-3%, while also being mindful of not overly burdening the economy or causing a significant rise in unemployment rates.
Bullock also pointed out the emergence of “second-round effects” in areas like wages, observing that businesses are currently able to pass on increased costs to maintain profit margins, a trend reflecting sufficient demand.
At the same panel, BoE Deputy Governor Dave Ramsden stated that monetary policy in UK would likely need to remain “restrictive for an extended period” to effectively bring inflation back to 2% target.
Additionally, Pablo Hernández de Cos, Governor of Bank of Spain, noted that tight monetary policy is necessary in the short term. However, he also mentioned the possibility of easing should inflation slow as forecasted.