The bond market has turned uber-hawkish following Reserve Bank of Australia (RBA) governor Michele Bullock’s guidance on interest rates, where she ruled out further rate cuts and warned that rates may need to go higher to tame stubbornly high inflation.
“I don’t think there are interest rate cuts in the horizon for the foreseeable future”, Bullock said at her post-board meeting press conference last week. “The question is: is it just an extended hold from here, or is it possibility of a rate rise?”.
“If it does look like inflation is not coming sustainably back to the band, and it’s going the other direction, then the board will have to take action, and it will”, she said.
