Michele Bullock, Assistant Governor (Financial Stability) of the Reserve Bank of Australia, speaking as part of a special group.
- Said high levels of debt leave households vulnerable to shocks
- Says RBA will take this vulnerability into account for monetary policy
Michelle Bullock is head of financial stability if his comments on the financial stability should not be too much of a surprise. The levels of household debt is high. An increase in interest rates would be likely to result in more of the household income goes on the repayment of the debt, and less in consumption — and therefore, the RBA concern.If the RBA is going to take the high levels of debt into account in setting rates, while you might think hiking would be smaller and slower than they otherwise would be were the Bank targeting of inflation and employment mandates that we are often led to believe.
Anyway … AUD shows little response. Here is Ms. Bullock with a sample of 5 of them: