RBA’s Bullock says services inflation remains a little sticky
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Reserve Bank of Australia (RBA) Governor Bullock said on Friday that services inflation remains a little sticky. Key Quotes Services inflation remains a little sticky.Labour market still a little bit tight, could be close to balance.Labour market in a good place.Consumption is beginning to recover.Q2 inflation was a little higher than expectations, but moving in right direction.Must be cautious as the monthly CPI data are volatile.Dwelling costs and services are a little higher than expected.Risks are relatively balanced on inflation. Market reaction At the time of writing, the AUD/USD pair is trading 0.46% lower on the day to trade at 0.6555. RBA FAQs The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening. While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie…
Filed under: News - @ October 9, 2025 11:25 pm