RBA’s threat of a rate rise rings a bit hollow

August 11, 2026 — 3:56pm

You have reached your maximum number of saved items.

Remove items from your saved list to add more.

The Reserve Bank is making a lot of noise that it could lift interest rates.

But the RBA’s own forecasts and analysis suggest that barring another unexpected inflation spike – the world’s looking at you, Donald Trump – it is going to struggle to follow through with that threat.

While governor Michele Bullock often says the Reserve only has one lever to deal with inflation, she actually has another. And she deploys it every time she stands up to do a press conference or make public statements.

Her voice is a powerful one. If she were to warn of economic disaster or bright days ahead, consumers, investors and markets would listen and act. In central bank jargon, it’s called jawboning.

And threatening to inflict more interest pain on the economy is a good example of jawboning. Again and again on Tuesday, she said there were upside risks to inflation and that the bank may have to........

© WA Today