Meanwhile, the Australian share market is slightly higher today after another downbeat trading session on Wall Street, with the S&P 500 and Nasdaq Composite posting further losses.The first question to Michele Bullock was if households are spending less according to the national accounts, which were released yesterday, why are the RBA not adjusting down their forecasts?
"But just as inflation is felt differently by various groups in the community, so too are interest rate moves," she said. "Information received through the RBA's liaison program indicates that more people than usual are seeking support from community organisations, and often for the first time," she said.Another way to come at the question of why getting inflation down is a priority is to "look at the effects that high inflation has had on people over the past three years", Ms Bullock said.
But inflation causes hardship too, she says, for all Australians and particularly for the more vulnerable in our community. She also acknowledged that despite a gradual easing over the past 18 months, "the labour market remains relatively tight, with labour availability still a constraint for some businesses and job vacancies elevated".Ms Bullock has acknowledged that the central forecast for inflation was based on cuts in the cash rate starting later this year, which was the path implied by the market.
The RBA is focused on trying to navigate the so-called "narrow path", she says, which is bringing inflation back to target in a reasonable timeframe while trying to preserve employment. "Given the starting point of high inflation and a relatively tight labour market, and that low and stable inflation ultimately supports our full employment objective, our highest priority has been and remains to bring inflation down," she said.
Ms Bullock agreed to continue the practice after taking over the role of governor last year, following in the footsteps of Glenn Stevens and Phillip Lowe . But recently car makers have been forced to scale back their ambitions for electric cars and now Reuters is reporting Volvo will join them, scrapping its target of going all electric by 2030.
Volvo sells a mix of electric and hybrid cars, and had until now remained steadfastly committed to its plans to only sell fully electric cars by 2030.Wall Street's main index, the S&P 500, is doing even worse. It's down 2.3% since the month began.