Australia picks Michele Bullock as next central bank governor, making her the first woman to lead the RBA

Australia has appointed Michele Bullock as the ninth governor of the Reserve Bank of Australia, the country’s Treasury said Friday.

Bullock, currently deputy governor of the central bank, becomes the first woman to lead the Australian central bank in its 63-year history, the Treasury said. She succeeds incumbent Philip Lowe when he finishes a seven-year term in office on Sept. 17.

“Her appointment strikes the optimal balance between providing exceptional experience and expertise and offering a fresh leadership perspective,” the Treasury said.

“We are confident that Ms Bullock will provide the strong leadership and stability necessary for the RBA to navigate an increasingly complex and rapidly changing economic environment.”

Bullock is viewed as a continuity appointment, with likely few immediate policy changes. She will be expected to see through reforms at Australia’s central bank at a challenging time when a confluence of numerous global complexities is making policymaking difficult.

The RBA held its official cash rate steady at 4.10% last week. The Australia Bureau of Statistics’ monthly inflation indicator showed inflation at 5.6% in May — still some way off the central bank’s target for between 2 to 3%. Unemployment in Australia came in at 3.5% in May.

The RBA is Australia’s central bank and banknote issuing authority. Bullock will now oversee the implementation of the 51 recommendations contained in an external review of the RBA that was first released in April, which includes the strengthening of transparency, accountability and its processes.

“I am deeply honored to have been appointed to this important position. It is a challenging time to be coming into this role, but I will be supported by a strong executive team and boards,” Bullock said in a statement. “I am committed to ensuring that the Reserve Bank delivers on its policy and operational objectives for the benefit of the Australian people.”

In her most recent policy speech as RBA deputy governor last month, Bullock said the Australian central bank’s goal is to return the labor market and the market for goods and services back to a level more consistent with full employment.

“We think this can be achieved if employment and the economy more generally grow at a below trend pace for a while. This would help to bring demand and supply into better balance and give us the greatest chance of securing sustainable full employment into the future,” Bullock said June 20.

“Our most recent forecasts have inflation returning to target by mid-2025, while employment growth slows but does not contract. The unemployment rate is expected to rise to 4½ per cent by late 2024,” she added.

“While 4½ per cent is higher than the current rate, this outcome would still leave us below where it was pre-pandemic and not far off some estimates of where the (non-accelerating inflation rate of unemployment) might currently be. In other words, the economy would be closer to a sustainable balance point,” she said.

Bullock first joined RBA as an analyst in 1985 and has been deputy governor since April 2022. She studied economics at Australia’s University of New England and the London School of Economics and Political Science.

Lowe said Bullock is “a first-rate appointment” after the announcement.

Bullock’s appointment comes after Lowe had faced criticism over his policy guidance and communication. After repeatedly saying in 2021 that interest rates would not rise until 2024, Lowe ended up hiking interest rates by a400 basis points since May last year to its highest in 11 years when inflation unexpectedly surged.

The Australian Treasury and the RBA thanked Lowe for his services in his 43-year association with the central bank. The Treasury acknowledged his role in managing the central bank through a period of “exceptional economic disruption and uncertainty, including the impacts of the Covid-19 pandemic and Russia’s invasion of Ukraine.”

“We respect and appreciate the remarkable dedication and contribution he has made to our country and economy, and the way he has conducted himself in a difficult role at a challenging time,” the Treasury said.

Correction: This story was corrected to reflect the month for the most recent unemployment rate figure.