RBA Governor Bullock testimony key as rate hike odds hit 70-75%

Bullock's parliamentary appearance today is a routine hearing, not a policy meeting, so market impact may be limited unless her comments differ from the RBA's recent tone. Still, any new remarks on inflation persistence or the labor market could shift rate expectations ahead of the 28-29 September meeting, where a further 25-basis-point hike currently carries a 70-75% probability.

The Australian dollar and short-end yields are most sensitive to any hawkish or dovish surprise in the Q&A, given markets are already heavily positioned for a hike. As trimed mean inflation remains above the RBA's 2-3% target, traders are listening for any sign of how much additional tightening the board sees as necessary.

Bullock today appears before parliament with a live rate decision still pending next month's meeting.

• RBA Governor Michele Bullock, alongside Deputy Governor Andrew Hauser, Assistant Governor (Economic) Sarah Hunter and Assistant Governor (Financial System) Brad Jones, appears before the House of Representatives Standing Committee on Economics today.
• The central bank increased the cash rate by 25 basis points at each of its first three 2026 meetings (Febury 3, March 17, May 5), raising it to 4.35%, before holding at the subsequent two meetings (June 6, August 11).
• Trimed mean inflation, the RBA's preferred underlying measure, stood at 3.6% year-on-year as of July, still above the 2-3% target band.
• The next decision falls on 28-29 September, with a 25-basis-point hike currently priced around 70-75%.
• Today's hearing is a routine parliamentary appearance rather than a scheduled monetary policy speech, though any comment on inflation or rates could move pricing ahead of next month's meeting.

Today, Rserve Bank of Australia Governor Michele Bullock appears before the House of Representatives Standing Committee on Economics, with Deputy Governor Andrew Hauser, Assistant Governor (Economic) Sarah Hunter and Assistant Governor (Financial System) Brad Jones. The hearing is a routine parliamentary appearance where the Governor updates the committee on the bank's operations before taking questions, not a scheduled policy speech, but the timing puts it firmly on the radar of currency and rates traders.

The RBA is in the middle of a rate hiking cycle that restarted earlier this year. The board lifted the cash rate by 25 basis points at each of its first three meetings of 2026, on Febury 3, March 17 and May 5, bringing it to 4.35%. It then held steady at its June 6 and August 11 meetings, conluding that the earlier increases needed time to work through the economy. At the August meeting the board unanimously kept policy on hold, noting that financial conditions had tightened after the three hikes and that the economy was slowing broadly as expected.

Inlation remains the key swing factor. The RBA's preferred trimed mean measure, which strips out the most volatile price moves, was running at 3.6% year-on-year as of July, unchanged from the prior reading and still above the top of the bank's 2-3% target band. Headline CPI eased to 3.5% over the same period. That combination of cooling headline inflation alongside sticky underlying price pressure is the backdrop against which markets are pricing today's testimony and next month's decision.

The board's next sceduled meeting is on 28-29 September, and a further 25-basis-point hike is priced at around 70% to 75%, relecting a market view that the inflation fight is not over even as the economy shows signs of slowing. Today's committee hearing gives Bullock and her colleagues a chance to address that pricing directly through MP's questions, though any market response is likely to hinge on unscripted answers rather than a prepared statement.

There is also an ongoing, mostly quietly spoken tension between the RBA and the government over spending's role in inflation. Bullock has ackonwledged in past parliamentary hearings that public demand feeds into the same aggregate demand pressures the bank is trying to cool, telling one committee plainly that it doesn't take much additional spending to make the job of returning inflation to target more challenging. Treasurer Jim Chalmers has pushed back on any suggestion the government is the main culprit, pointing instead to private demand and global factors such as elevted energy prices. Neither side tends to press the point too hard in public, and today's hearing is unlikely to change that, but the underlying friction over how much fiscal policy is complicating the RBA's task remains part of the backdrop to any further hike.