Central Banks
Hawkish RBA Struggles to Win Over Market That Expects Easing
- Bank considered tightening this month, defying global trends
- RBA’s credibility took some blows under previous governor
Michele Bullock
Photographer: Mridula Amin/BloombergThis article is for subscribers only.
Australia’s central bank chief Michele Bullock is struggling to persuade money markets and economists with her hawkish message, in a sign that the Reserve Bank has work to do to win back credibility lost during the pandemic.
The RBA this week used minutes of its August meeting to convey how seriously it considered raising interest rates before opting to keep them higher for longer. While the statement made it clear a cut on its cash rate currently at a 12-year high of 4.35% wasn’t on the horizon, economists forecasting one in November and traders pricing an easing in December, remain unmoved.