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- RBA’s Bullock: Further rate increases will be needed in the months ahead
RBA’s Bullock: Further rate increases will be needed in the months ahead
Reserve Bank of Australia (RBA) Deputy Governor Michele Bullock is speaking at a business lunch hosted by the Economic Society of Australia, in Brisbane.
Key quotes
Further rate increases will be needed in the months ahead.
Financial stability risks from households "are a little elevated" but unlikely to be substantial.
Risks will be important in deciding size and timing of future interest rate rises.
Risks will be influenced by the future path of employment growth.
Current strong growth in employment means people will have jobs to service their mortgages.
Aggregate household balance sheets are in very good shape.
Households have saved a large amount of money since the onset of the pandemic.
Borrowers with the most debt also tend to have the highest liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations.
Household sector as whole has accumulated sizeable equity via higher housing prices.
House prices would have to fall a fair way for negative equity to become a systemic concern.
Much of the debt is held by high-income households that have the ability to service their debt.
Market reaction
AUD/USD is extending its latest upside on the above comments. The spot is currently trading at 0.6831, adding 0.29% so far.
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