RBA: rates could rise; judge hammers Gerry Harvey; Apple overtakes Nvidia
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What is the main topic discussed in this episode?
Welcome to Fear and Greed, business news you can use today. Reserve Bank Governor Michelle Bullock warns that interest rates could rise if inflation isn't quickly brought under control. A federal court judge hammers Jerry Harvey for his disregard of customers. And Apple replaces NVIDIA as the world's biggest company. Plus, Origin Energy says the personal information of 900,000 customers was stolen in last week's hack. And LVMH founder and owner Bernard Arnault Accused of not hiring fat people. It is Wednesday, the 29th of July, 2026. I'm Michael Thompson and good morning, Sean Aylmer.
What did Reserve Bank Governor Michele Bullock warn about interest rates and inflation?
Good morning, Michael. It's a funny show, isn't it, sometimes? It is a real mix. We will get to Mr. Arnaud and his comments towards the end of the show, Sean. But the main story this morning... Reserve Bank Governor Michelle Bullock yesterday made it clear that the central bank will lift interest rates if inflation remains above target and warned that Australian living standards will stagnate if weak productivity growth is not addressed. Now, Bullock said that the slowdown in productivity growth made the economy more vulnerable to global shocks and that the best thing the bank could do to improve living standards was meet its dual mandate of low inflation and full employment. She certainly didn't shy away, it seems, from the potential, at least for another rate rise saying, and I quote, the board is prepared to act as required to achieve its mandate, including by increasing the cash rate further if needed.
That feels pretty clear, right?
It does. The full effect of the three rate rises are yet to hit the broad economy, though. Bullock said that yesterday. And Australia's inflation problem predates the Middle East conflict. That's the other thing that came out of it. Critical to any decision on interest rates, of course, is the inflation data. The June quarter inflation figures are due out today. If the underlying rate rises... From the previous reading of 3.6%, then the chance of a rate hike and a fortnight's time rise pretty substantially. Bullock said the board of the Reserve Bank is acutely aware of the impact of high inflation. She said it strains households' budgets, complicates business planning and weighs on confidence.
Now, as you have told me, time and time again. Product, not that you are relentless in this message, but I have definitely absorbed it clearly. Productivity is one of the most efficient ways to lower inflation. Am I right in saying that, Sean? The Reserve Bank governor said that the lack of productivity growth was a fundamental challenge for the Australian economy now and over the next few years.
She also said an increasing frequency of shocks had become a defining feature of the global economy, including the COVID-19 pandemic, energy disruptions triggered by Russia's invasion of Ukraine, conflict in the Middle East, severe weather events and escalating tensions caused by US President Donald Trump's trade war. Bullock said lifting business investment is critical for reversing the decline in productivity, growth and living standards. She added there's considerable uncertainty around investment in and the benefits from Artificial intelligence on housing, she said the market had eased by more than the Reserve Bank forecast back in May, reflecting a general softening in sentiment following the central bank's three rate hikes and recent policy developments.
That's what she called them, recent policy developments, i.e. Capital gains tax negative gearing changes. Quite a broad ranging speech yesterday from the Reserve Bank governor. And I think the two takeaways, they're happy to lift interest rates if they need to. And the economy has got a fair bit of work to do, particularly around productivity.
Yeah, it really does set the scene for those CPI figures today. Certainly, we'll be watching that with bated breath and we'll have that in the afternoon report this afternoon, Sean, and then full analysis on tomorrow morning's episode. The local share market closed up half a percent yesterday to 8,939 points.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:06–0:45
2
What did Reserve Bank Governor Michele Bullock warn about interest rates and inflation?
0:45–5:21
3
How could productivity and global shocks affect Australia’s living standards?
5:21–8:05
4
What will June quarter CPI data mean for the RBA's next move?
8:05–17:09
5
How did local share markets and commodity prices react to recent news?
17:09–17:45
Speakers
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