Australians are staring down severe interest rate pain, according to one top economist, as the Treasurer remains tight lipped on whether major changes at the RBA will affect upcoming cash rate decisions.
Ms Bullock was unveiled as Philip Lowe’s replacement at the helm of the central bank on Friday after serving as his deputy for little more than a year.
But the change at the top might not usher in a shift in the bank’s monetary tightening, with the hundreds of thousands of Aussies who are set to come off fixed-rate loans still in for an even greater shock in the coming months. “I think they’re going to go up before they go down. I think there’s another 50-to-100 basis points on the upside,” Mr Tulip told Sky News Australia on Sunday.
The bank hopes its monetary tightening will bring inflation back to the 2-3 per cent target band by 2025 without sacrificing Australia’s employment gains. While he was asked more than five times how inflation would be handled by the RBA and the government in the near-term, Treasurer Jim Chalmers consistently avoided pre-empting the bank’s decisions.
“I'm not going to pre-empt the decisions that Michele Bullock might recommend to the board. I think that's really important.”
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