RBA Governor Michele Bullock struck a measured tone in a fireside chat today, saying the Australian economy and labor market remain “a little bit tight,” while inflation is “a little bit elevated” but not “taking off again”. The comments came after stronger-than-expected CPI data earlier in the day had fueled a sharp rise in rate hike expectations.
Bullock emphasized that it would take time for the RBA to determine its next move, adding that policymakers would “have to be patient” . Her remarks contrasted with the market’s earlier reaction, which had pushed the probability of a May hike from 84% to 95%, and lifted expectations of a third increase by year-end from 40% to 60%.
Following her speech, rate-sensitive markets pared gains, with traders dialing back expectations of rapid tightening.
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