New RBA governor says she’s working with treasury to ‘modernise and clarify’ the bank’s objectives with the focus still on inflation
In a speech in Sydney, Michele Bullock fell into line with Albanese government, saying the RBA had always had a twin mandate of achieving full employment alongside low and stable inflation.In a speech in Sydney, Michele Bullock fell into line with Albanese government, saying the RBA had always had a twin mandate of achieving full employment alongside low and stable inflation.
However, while the central bank had a target of keeping inflation between 2% and 3%, “it would be unwise to specify a fixed numerical target for full employment”, she said. Bullock said she was currently working with treasury to “modernise and clarify” the bank’s objectives in the wake of the review. “These changes won’t, however, fundamentally change the way we formulate monetary policy.”
“It is possible that this can be done with the cash rate at its current level but there are risks that could see inflation return to target more slowly than currently forecast,” Bullock said. “The Board will not hesitate to raise the cash rate further if there is a material upward revision to the outlook for inflation.”even as the economy shed almost 40,000 full-time jobs.
“The employment and inflation objectives are also complementary when there are influences that expand the productive capacity of the economy – like strong productivity growth, successful innovation and expansions in the capital stock,” Bullock said.
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