Share and Follow
Key Points
- Michele Bullock has made her first public remarks since the US announced sweeping tariffs on many countries last week.
- The Reserve Bank of Australia governor said there would be an “inevitable period of uncertainty and adjustment” ahead.
- Bullock said the RBA was “carefully considering several factors” ahead of a decision on interest rates in May.
“It will take some time to see how all of this plays out and the added unpredictability means we need to be patient as we work through how all of this could affect demand and supply globally.”
The VIX index, which measures market volatility, has spiked up to 60 — the highest level since the early stages of the COVID-19 pandemic.
Australia in good place to weather volatility, Bullock says
Bullock said that, being mindful of not adding to uncertainty, it was too early for the RBA “to determine what the path will be for interest rates”, but that it was closely monitoring financial market conditions at home and abroad.
On Wednesday, traders had been pricing in five rate cuts by the end of the year, including the possibility of an emergency 50-basis-point reduction at the RBA’s next meeting in May.
“That said, our general conviction around the path for lower RBA rates has increased,” he said.
