If the US is poised to start cutting interest rates, what does it mean for the Reserve Bank's fight against inflation?
RBA governor Michele Bullock will be waiting to see if US Federal Reserve chair Jerome Powell cuts US interest rates overnight.
If the Fed leaves it too late to cut rates, it may end up causing too much damage to the US economy by pushing it into recession. The graph below, from Reuters, shows how Australia's dollar has performed against the US dollar in recent years. In recent months, RBA governor Michele Bullock has acknowledged that Australia is lagging the US in the cycle and has repeatedly said it's unlikely the RBA will cut rates this year.
"But we've chosen ... very deliberately to try and bring inflation down while not turning the economy into a recession and spiking unemployment. That's been our strategy," she said.
US Federal Reserve Jerome Powell Michele Bullock Cash Rate Target Inflation Unemployment US Interest Rates
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