During the press conference, RBA Governor Michele Bullock emphasized the significance of attaining the target range for inflation and regarded the risks as evenly balanced.
During the RBA's press conference, Governor Michele Bullock emphasized the importance of decreasing inflation, indicating that the objective is more crucial than market pricing. She also downplayed the potential impact of tax cuts on consumption and the economy, and prioritized the need to mitigate inflation risks by raising rates in November. Governor Bullock expressed understanding for mortgage holders concerned about higher interest rates but emphasized the positive effects of addressing inflation. The Board remains committed to maintaining a balanced approach to inflation and employment, with an optimistic outlook on achieving the inflation target.
Despite keeping the Cash Rate unchanged at 4.35%, the RBA's Rate Statement maintained a hawkish stance, emphasizing concerns about inflation that remained pegged at 4.1%. The Statement highlighted expectations for moderate wage growth consistent with inflation targets, uncertain economic outlook due to inflation risks, and forecasts for inflation to return to the target range by 2025. Furthermore, the RBA did not rule out potential interest rate hikes, depending on income data, signaling a cautious approach in monitoring economic and policy uncertainties.
The Quarterly Statement of Monetary Policy revealed lower growth and employment forecasts, along with revised inflation expectations for the near future. GDP growth forecasts for H1 2024 and full-year 2024 were adjusted downwards, and the unemployment rate is anticipated to rise. The RBA revised its inflation projections for 2024, indicating a return to the 2-3% range by December 2025. These adjustments reflect the RBA's cautious stance in light of economic shifts and uncertainties.
The AUD/USD experienced fluctuations in response to the RBA's statements and press conference. Prior to these events, the currency pair initially declined before rebounding to a higher level. Following the RBA's announcement and remarks, the AUD/USD displayed increased volatility, ending the day with a 0.47% gain.
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