Australia’s 10-year government bond yield held near 4.80% after touching a two-week low in the previous session, as the Reserve Bank of Australia reaffirmed its hawkish policy stance. Governor Michele Bullock told parliament the central bank stands ready to tighten further if price pressures persist, stressing that inflation “with a three in front of it” is unacceptable. The RBA expects both headline and core inflation to remain above its target band throughout this year.
Bullock’s comments echoed those of Deputy Governor Andrew Hauser, who recently warned that inflation is still too high and remains a major challenge for policymakers. Fresh data showed consumer inflation expectations rose to an eight-month high of 5% in February, reinforcing the case for additional tightening.
The RBA lifted its cash rate to 3.85% last week, becoming the first major central bank to resume rate hikes this year. Money markets now imply an 80% probability of another increase in May and a 60% chance of a third move later in the year.
