RBA governor Michele Bullock says the risks to their outlook are “balanced”, saying she sees the potential for inflation to come in hotter or cooler than their forecasts.
Speaking at a parliamentary committee this morning, Ms Bullock said a highly volatile global environment and a potentially more resilient consumer were risks to the “upside”, as the bank attempts to chart a path back to 2.5 per cent inflation by 2026.
Ms Bullock’s comments spoke to her earlier warnings that rates could go either way from here, and that the bank was committed to achieving their mandate.
“We do look to the data to confirm that we're on the path we think we're on. And if the data tells us something different, then we have to be prepared to think about where we might need to tweak our forecasts or our thinking,” she said.
“It's fair to say at the moment that … we feel we have balanced the risks on either side.
“But that can change depending on the way the data comes out.”
Ms Bullock also said that while price growth for goods has come down sharply and faster than expected, inflation in the services sector has not come down as quickly and remains sticky.
