RBA's Bullock says will take high levels of debt into account for policy

Michele Bullock, Assistant Governor (Financial Stability) of the Reserve Bank of Australia, speaking as part of a panel.

• Says high levels of debt leave households vulnerable to shocks
• Says RBA will take this vulnerability into account for monetary policy

Michelle Bullock is head of financial stability so her comments on financial stability shouldn't be too much of a surprise.

Levels of household debt are high. An increase in interest rates would likely translate into more household income going into debt repayment, and less into consumption - hence the RBA concern.

If the RBA is going to take the high levels of debt into account in setting rates then you'd imagine hikes would be smaller and slower than they otherwise would be were the Bank targeting its inflation and employment mandates as we are often led to believe.

Anyway ... AUD is showing little response. Here is Ms. Bullock with an example of 5 of them: