Insights from Michele Bullock’s Speech to Australian Business Economists

On Wednesday, November 22, 2023, Michele Bullock, Governor of the Reserve Bank of Australia (RBA), delivered a speech at the Australian Business Economists Annual Dinner titled “A Monetary Policy Fit for the Future”. In her speech, Bullock addressed the current state of monetary policy in Australia and outlined key changes the RBA is implementing to ensure its framework remains robust and relevant.

Key takeaways from the speech:

• The RBA is committed to maintaining a robust monetary policy framework that is fit for the future.
• Changes are being implemented to the RBA’s monetary policy processes based on recommendations from the Review of the Reserve Bank.
• Starting in February 2024, the RBA will increase the number of Board meetings to eight per year.
• The RBA will modify its communication strategies, including the issuance of a post-meeting statement by the Board rather than the Governor.
• The RBA is dedicated to fostering a diverse and inclusive workplace where every employee feels a sense of belonging.

A Deeper Dive into the Changes

Bullock began her speech by acknowledging the current economic climate, stating that inflation appears to have peaked and is moving in the right direction, although perhaps at a slower pace than initially anticipated. She emphasized the importance of the RBA’s decision-making processes, highlighting the need for continuous improvement.

A major focus of the speech was the changes the RBA is implementing to its monetary policy processes. These changes include:

• Increased frequency of Board meetings: Moving from seven to eight meetings per year, allowing for more in-depth discussions and analysis of economic trends.
• Revised communication strategies: Issuing a post-meeting statement from the Board as a whole, rather than just the Governor, promoting transparency and collective responsibility.
• Focus on diversity and inclusion: Creating a workplace where diverse perspectives are valued and encouraged, leading to richer discussions and better decision-making.

Looking Ahead

The RBA is committed to ensuring its monetary policy framework remains relevant and effective in a changing economic landscape. By implementing these changes, the RBA aims to further improve its decision-making processes and make its communications more transparent and accessible to the public.