The RBA was too late to hike rates. It didn’t want to be too late to cut.
The Reserve Bank was caught off guard by the post-pandemic inflation surge — a misstep its board is determined not to repeat.
Michele Bullock does not want to see the central bank repeat its mistakes of 2022.
Speaking at a Senate Economics Committee hearing in Canberra on Friday, the Reserve Bank governor made it clear that the board was keen to act early rather than risk delaying rate cuts.
“The board ... doesn’t want to be late,” Bullock said, explaining one of the factors behind this week’s decision to ease rates by 25 basis points.
“And arguably we were late raising interest rates on the way up, we didn’t respond as quickly as we should have [in the face of rising inflation],” she said.
