Opinion

Rise in interest rates only narrowly avoided

Reserve Bank of Australia governor Michele Bullock has sent a stern reminder that the sharemarket is not the economy.

John KehoeEconomics editor

Updated Aug 6, 2024 – 3.23pm, first published at 3.10pm

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Reserve Bank governor Michele Bullock has sensibly nixed premature clamouring for an interest rate cut this year and subtly sent a message to governments that their profligate pre-election spending is prolonging the inflation problem.

An interest rate rise was closer than many had assumed at the RBA board meeting on Tuesday, and a more hawkish-sounding Bullock declared it “was a very serious consideration”.

John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury.