RBA Governor Bullock Says Inflation Fears Materializing

By James Glynn

SYDNEY--Reserve Bank of Australia Gov. Michele Bullock warned Friday that the central bank's concerns regarding stubborn inflation are materializing.

Inflation remains "too high" and recent developments suggest that "some upside risks to inflation appear to be materializing," Bullock said in a testimony before parliament.

She noted that while most global central banks initially anticipated a brief conflict in the Middle East, the situation has persisted, contributing to rising interest rates worldwide.

Her remarks follow statements over the past month by senior RBA officials that inflation remains elevated and that policymakers are focused on getting it down.

Money markets have nearly fully priced in an interest rate increase by the RBA later this month, following three increases earlier in the year.

With energy prices remaining elevated, businesses are now less prepared to absorb cost price increases, Bullock added.

"Because of these capacity pressures and the Middle East conflict, inflation is likely to remain elevated for some time," she said.

Despite higher inflation and interest rates, the country's job market remains tight, Bullock said.

"Various indicators continue to suggest that labor market conditions remain close to, but a little tighter than, full employment, she said.

Financial stability concerns also remain contained for now, even as house prices have tumbled since May.

"I recognize that higher interest rates are difficult for Australians with mortgages who are also facing cost-of-living pressures," she said.

"But reducing inflation is essential. High inflation hurts all Australians and is especially tough on people with lower incomes and those in vulnerable financial positions," Bullock added.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

September 17, 2026 21:09 ET (01:09 GMT)