RBA Gov Bullock wary that cutting rates too quickly could lead to inflation above midpoint

Reserve Bank of Australia Governor Bullock:

• The board is committed to being guided by the incoming data and our evolving assessment of the risks.
• While the strong employment growth is good news for jobseekers, we are alert to the possibility that it is signalling a bit more strength in the economy.
• We have not pre-committed to any particular course of action on interest rates.
• Satisfied with the progress on inflation so far – though our job is definitely not done.
• The central projection suggests that if monetary policy is eased too quickly or by too much, disinflation could stall and inflation would settle above the midpoint of the target range.
• So the board remains cautious about prospects for further policy easing.
• The economic outlook remains uncertain.
• We have made good progress on inflation, however, the board needs to be confident that it is returning to the target range sustainably.

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Michele Bullock, Governor;

• Andrew Hauser, Deputy Governor;
• Sarah Hunter, Assistant Governor (Economic);
• and Brad Jones, Assistant Governor (Financial System)

are all appearing before the Australian parliament’s House of Representatives Standing Committee on Economics

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AUD/USD is not a lot changed, circa 0.6398

This article was written by Eamonn Sheridan at www.forexlive.com.