From a bitter political fight on rates to inflationary haircuts, Bullock’s term as Reserve Bank governor is unlikely to get easier.
Her term started with a warning of the inflationary dangers of a haircut. Twelve months later, Michele Bullock turned her attention to those who may have to
Her jawboning has been accompanied by a “political” jawboning about the bank. Treasurer Jim Chalmers has for months argued the bank’s interest rate settings have either “hammered” or “The big increases in interest rates preceded her ascension to the job,” he says. “But she’s done a pretty reasonable job overall.”One of the biggest issues that hurt former governor Philip Lowe was the bank’s so-called “forward guidance” – giving public signals about future movement in interest rates.“Clearly, the bank and Michele were burnt by the forecast that interest rates would stay low. I think the bank has taken the wrong lesson from the issues around forward guidance,” he says.
“The biggest changes have been at the cultural level. These aren’t going to affect interest rates here and now, and so people aren’t noticing them, but they are setting the course for the bank for the future, which in terms of monetary policy should put it in a better position,” she says.“If you’re trying something for the first time, then it’s going to take time to get it right,” she says.
Masters notes that Bullock has let her personality shine through in her press conferences and says that will be important in the coming months.
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