Michele Bullock cannot count on a honeymoon period when she takes over at the Reserve Bank of Australia in September. The country’s Treasurer Jim Chalmers on Friday unveiled her appointment as the central bank’s first female governor after deciding not to extend gaffe-prone Philip Lowe’s seven-year tenure. By the time she steps up, Bullock, currently deputy governor, will probably face an economic war on two fronts.
Lowe is a fall guy for the failure by global central banks to take rising prices seriously following the pandemic. He compounded his error by saying in 2021 that absent wage increases he didn’t expect rates to increase until 2024, and then last year added he was “sorry if people listen to what we said and then acted on that”. The RBA has hiked rates 12 times in the current tightening cycle. The heat will at least stay on Lowe if the bank again raises rates at either of the two monetary policy meetings before the handover.