{"id":438515,"date":"2026-09-22T10:25:34","date_gmt":"2026-09-22T03:25:34","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/rbas-bullock-says-supply-shocks-hard-for-policy-to-manage-flags-second-round-risk-438515\/"},"modified":"2026-09-22T10:25:34","modified_gmt":"2026-09-22T03:25:34","slug":"rbas-bullock-says-supply-shocks-hard-for-policy-to-manage-flags-second-round-risk","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/rbas-bullock-says-supply-shocks-hard-for-policy-to-manage-flags-second-round-risk-438515\/","title":{"rendered":"RBA&#8217;s Bullock says supply shocks hard for policy to manage, flags second round risk"},"content":{"rendered":"<div>\n<p>The screenshot is of the Kiwi, getting a push higher from Reserve Bank of New Zealand Governor Breman earlier:<\/p>\n<ul>\n<li><a href=\"https:\/\/investinglive.com\/central-banks\/rbnz-s-breman-says-higher-oil-prices-point-to-firmer-near-term-inflation\" target=\"_blank\" rel=\"follow\">RBNZ&#8217;s Breman says higher oil prices point to firmer near-term inflation<\/a><\/li>\n<\/ul>\n<p>Back to Bullock &#8230;<\/p>\n<p dir=\"ltr\">The two comments released so far are limited in scope, but they reinforce rather than shift the hawkish framing Bullock struck before parliament last Friday, when she pointed to materialising upside inflation risks and flagged a general view that the neutral rate has risen. Her comment that supply shocks are difficult for monetary policy to manage restates a familiar central banking constraint, but pairing it with a focus on second round effects, the way an initial price shock feeds into broader wage and price setting behaviour, signals continued attention to exactly the kind of persistence that would support further tightening. With the RBA&#8217;s September 28-29 meeting a week away and a 25 basis point hike widely expected, these early remarks give markets little reason to revise that view, though the fireside format means further, more specific comments may still emerge.<\/p>\n<p dir=\"ltr\">&#8212;<br \/>\nBullock&#8217;s first comments from today&#8217;s fireside chat are sparse, but they don&#8217;t walk back an inch of the hawkish line she took last week.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>RBA Governor Michele Bullock said supply shocks are difficult for monetary policy to deal with.<\/li>\n<li>She said policy needs to address the second round effects of such shocks on inflation.<\/li>\n<li>These are the first comments to emerge from Bullock&#8217;s fireside chat appearance, with further remarks expected given the format.<\/li>\n<li>The comments are consistent with the hawkish tone Bullock struck in parliamentary testimony last Friday, when she pointed to materialising upside inflation risks and a rising neutral rate.<\/li>\n<li>AI boom adding to excess demand in Australia&#8217;s economy.\u00a0<\/li>\n<\/ul>\n<p dir=\"ltr\">\nReserve Bank of Australia Governor Michele Bullock said supply shocks are difficult for monetary policy to manage, and that policy needs to deal with the second round effects such shocks have on inflation, in early comments from today&#8217;s fireside chat appearance. The remarks are limited in number so far, a feature of the less structured, conversational format, but they fit squarely within the hawkish tone Bullock has struck in recent public appearances.<\/p>\n<p dir=\"ltr\">Bullock&#8217;s comments echo the position she outlined before a parliamentary committee <a href=\"https:\/\/investinglive.com\/news\/investinglive-asia-pacific-market-news-boj-hike-and-rba-hawkish-tilt\/\" rel=\"follow\">last Friday<\/a>, when she said the upside inflation risks flagged in August are now materialising and pointed to a general view among policymakers that the neutral interest rate has risen. Her focus today on second round effects, the process by which an initial cost shock, such as higher oil prices, feeds into broader wage and price setting decisions across the economy, mirrors the concern she raised last week that persistent shocks are difficult to look through, and that businesses have grown more willing to pass on higher costs to customers.<\/p>\n<p dir=\"ltr\">The comments arrive a week ahead of the RBA&#8217;s September 28-29 meeting, where a 25 basis point increase from the current 4.35% cash rate is widely expected. Nothing in Bullock&#8217;s remarks so far suggests a departure from that expected path, though the fireside format, being less scripted than a formal speech, means further comments may still emerge as the appearance continues. Given the sparse volume of material so far, this piece will likely need updating as additional remarks come through.<\/p>\n<p dir=\"ltr\">\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The screenshot is of the Kiwi, getting a push higher from Reserve Bank of New Zealand Governor Breman earlier: RBNZ&#8217;s Breman says higher oil prices point to firmer near-term inflation Back to&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-438515","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/438515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=438515"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/438515\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=438515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=438515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=438515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}