RBA Governor Bullock flags tighter labour market, bolstering bets on a rate hike next week
AI Market Summary
RBA governor Bullock reinforced expectations for a near-term rate hike, citing a still-tight labor market and concern about second-round inflation from energy shocks. Major banks have shifted to forecast a September move and are already lifting fixed mortgage rates, tightening financial conditions. The repricing raises short-term rate volatility and supports the AUD via higher yield differentials, while increasing sensitivity across Australian risk assets to incoming unemployment data and guidance.
Impact level
● High
Affected assets
NCFXAUD2USD/USDT-0.28%
AI Insight · NCFXAUD2USD/USDTAI Insight
▼ Bearish
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Reserve Bank of Australia Governor Michele Bullock said in a Sydney speech that the labour market remains “a bit too tight”, adding to upward pressure on wages, business costs and inflation. She said unemployment would likely need to rise to between 4.5 and 5 per cent to take enough heat out of the labour market to ease inflation pressures. Most of the big four banks expect the RBA to lift rates next week, with ANZ also factoring in a September increase. Commonwealth Bank has also raised fixed-rate mortgage pricing, including its two-year fixed home loan rate.
