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Herd on the Terrace: Michele Bullock keeps her options open after 2026 interest rate hike number five
Michele Bullock keeps options open after the RBA's fifth interest rate hike of 2026.
Key points
- The RBA board dropped its warning that further rate hikes were on the horizon from its statement.
- Five interest rate increases are in the system, and the last couple have not yet flowed through.
- Inflation was tipped to stay above the target band until the end of 2027.
Why it matters. Borrowers may face higher costs for longer, since the rate rises will take at least 12 months to fully flow through and inflation was tipped to stay above target until 2027.
Reserve Bank of Australia governor Michele Bullock said on Tuesday that the board was 'preserving our options' after lifting the cash rate for the fifth time this year. The RBA dropped its earlier warning of further hikes, and Bullock said risks were 'balanced'. Inflation was tipped to stay above the target band until the end of 2027, and Bullock said next year would feel similar to a recession.
Latest updates
Herd on the Terrace: Michele Bullock keeps her options open after 2026 interest rate hike number five
It’s an art not a science listening to central bank bosses but The Bull has picked up a few clues from Michele Bullock on what’s ahead for interest rates. Plus: Terrace connections for Melbourne Cup winner. It’s an art, not a science, listening to central bank bosses but The Bull has picked up a few clues from Michele Bullock’s Tuesday press conference as to what’s ahead for interest rates and the economy. First the good news. The usually tough-talking Bullock gave a hint that the Reserve Bank board won’t be rushing into another interest rate hike after jacking up the cash rate for the fifth time this year. Won’t be rushing — but also won’t rule it out. “(There’s) five interest rate increases in the system now, the last couple haven’t even started to flow though yet,” the governor told journalists. “It is probably a good point to take stock for a minute and see what comes in in terms of the data.” That would imply rates are expected to stay on hold at the RBA’s meeting just before Christmas. Ever the environmentalist, Bullock is fond of recycling the line that she “does not give forward guidance” about future RBA decisions, a phrase which again featured on Tuesday. But bovines with good hearing and eyesight can still generally read the tea leaves clearly. Deleted from the RBA board’s statement was the warning that further rate hikes were on the horizon, which the governor backe.