RBA Governor Bullock Says Inflation Fears Materializing

RBA Governor Bullock Says Inflation Fears Materializing

By James Glynn

SYDNEY--Reserve Bank of Australia Gov. Michele Bullock warned Friday that the central bank's concerns regarding stubborn inflation are materializing.

Inflation remains "too high" and recent developments suggest that "some upside risks to inflation appear to be materializing," Bullock said in a testimony before parliament.

She noted that while most global central banks initially anticipated a brief conflict in the Middle East, the situation has persisted, contributing to rising interest rates worldwide.

Her remarks follow statements over the past month by senior RBA officials that inflation remains elevated and that policymakers are focused on getting it down.

Money markets have nearly fully priced in an interest rate increase by the RBA later this month, following three increases earlier in the year.

With energy prices remaining elevated, businesses are now less prepared to absorb cost price increases, Bullock added.

"Because of these capacity pressures and the Middle East conflict, inflation is likely to remain elevated for some time," she said.

Despite higher inflation and interest rates, the country's job mar...