RBA’s Bullock: February rate hike justified, Middle East conflict adds uncertainty

The Reserve Bank of Australia (RBA) Governor Michelle Bullock crossed the wires on Tuesday March 3 and she was hawkish. Bullock said that data justified February’s rate hike and that Middle East conflict adds to uncertainty.

Key takeaways:

"Board uncertain if financial conditions are sufficiently restrictive to return inflation to midpoint of target in reasonable timeframe.

Events in the Middle East a reminder of geopolitical uncertainty.

… prolonged shock could also have an adverse effect on global economic activity.

Range of indicators tell us that labor market conditions are tight.

Economic data since February rate hike support that move.

Underlying demand in economy is further from supply potential than we had assessed.

Large part of unexpected increase in inflation was sectors specific, likely to ease.

Believe we are well positioned for policy to respond if required.

A supply shock could add to inflation pressures.

We do have inflation that is already elevated, need to watch inflation expectations.

Every board meeting is live."