The Reserve bank's leaders have faced up to a grilling in parliament on Friday – admitting they took too long to raise interest rates. Following Tuesday’s rate cut the first since November 2020 MP's were asking whether there's a strong case for more.
Category
📺
TVTranscript
00:00The RBA Governor gets it.
00:05I know interest rates hurt people who have mortgages, but inflation hurts absolutely everyone.
00:10After delivering the first interest rate reduction in four years.
00:15It was welcome, but it's a drop in the ocean.
00:17No hints on when further relief is coming.
00:20We're not pre-committed, we're going to be data driven on this.
00:24I do welcome the fact, I do welcome the Governor's candour and frankness.
00:28The market expects two more cuts this year and one next year.
00:32But Ms Bullock is tapping the brakes.
00:35It is not our forecast for the interest rate.
00:37It is not forward guidance.
00:39It is not saying that this is going to be the future policy path.
00:43One concession.
00:44The bank waited too long to lift rates as inflation took off in 2022.
00:49And doesn't want to be late this time.
00:52We didn't respond as quickly as we should have.
00:54If we're going to start reducing interest rates,
00:57then we need to be thinking of doing it not when we are already back in the band,
01:03but as we start to get more confidence.
01:06They are still concerned that the labour market is still too hot.
01:10I think the fact that wages growth has slowed down despite very low unemployment,
01:16it tells us the labour market is probably not too hot.
01:19The Central Bank balancing between trying to guide the public
01:23and plan for President Trump's trade policies.
01:26I think it's really, really important.
01:27We could be wrong.
01:28People recognise that we're trying to be more honest and clear with people.
01:32We're going to be more open about that uncertainty.
01:34Sorry, but that's life.
01:36The Reserve Bank wants to see its preferred measure of inflation down to 2.5 per cent annually.
01:42It's currently at 3.2 per cent.
01:45So don't expect any further interest rate cuts any time soon.