RBA Gov. Bullock Continues to Rule Out Near-Term Interest Rate Cuts

SYDNEY—The Reserve Bank of Australia has ruled out the prospect of near-term interest rate cuts as it remains wary of upside risks to inflation which has proved more resilient than expected.

The central bank Gov. Michele Bullock told a parliamentary committee Friday that while money markets were anticipating an interest-rate cut before the end of the year, the probability of that was low.

The RBA’s board’s message after its recent policy meeting “was that it is premature to be thinking about rate cuts,” she said.

“Inflation is still too high and, in underlying terms, is not expected to be back in the top of the band until the end of next year,” Bullock said.

While circumstances could change, the outlook was uncertain, and based on what the board knows at present, it doesn’t expect to be in a position to cut rates in the near term, Bullock said.

Bullock’s comments are expected to disappoint home buyers who are struggling under the weight of elevated interest rates and immense debt.

The remarks also suggest that the RBA will lag well behind its global counterparts in cutting interest rates.

The RBA has held the official cash rate at 4.35% since November, having begun an aggressive tightening cycle back in May 2022, when the OCR was sitting at an emergency low of 0.10%.

Still, the RBA adopted a much gentler approach to raising interest rates than most of its G-10 counterparts, arguing that protecting employment was a key policy goal.

“I understand that this is not what many households want to hear. Those with mortgages are feeling the squeeze on their cash flows from the increase in interest rates over the past couple of years. Businesses too are facing higher borrowing costs. But the alternative of higher inflation for longer is much worse,” Bullock added.

Starbucks is making another major leadership change just one week after new CEO Brian Niccol started his job.

Michael Conway, the 58-year-old coffee chain’s head of North America, will be retiring at the end of November, according to a Monday filing with the Securities and Exchange Commission.

The decision came only six months after Conway took on the job. His position won’t be filled. Instead, the company plans to seek candidates for a new role in charge of Starbucks’ global branding.

The chief brand officer role will have responsibilities across product, marketing, digital, customer insights, creative and store concepts.

“Recognizing the unmatched capabilities of the Starbucks team and seeing the energy and enthusiasm for Brian’s early vision, I could not think of a better time to begin my transition towards retirement,” wrote Conway in a statement.

Conway has been at Starbucks for more than a decade, and was promoted to his current job—a newly created role—back in March, as part of the company’s structural leadership change under former CEO Laxman Narasimhan.

The coffee giant has been struggling with weaker sales in recent quarters, as it faces not only macroeconomic headwinds, but also operational, branding, and product development challenges.

Narasimhan was taking many moves to turn around the business, but faced increasing pressure from the board, shareholders, and activist investors.

One month ago, Starbucks ousted Narasimhan and appointed Brian Niccol, the former CEO at Chipotle, as its top executive. The stock has since jumped 20% in a show of faith for Niccol, who started at Starbucks last week.

When he was at Chipotle, Niccol made a few executive hires that were key to the company’s turnaround.

RBA Gov. Bullock Continues to Rule Out Near-Term Interest Rate Cuts

The remarks suggest the central bank will lag well behind its global counterparts in cutting interest rates