It will now take longer for inflation to return to the target
And this is no longer an acceptable outcome
We cannot allow inflation to get away from us again
The pickup in inflation is not down to just one factor
It is due to a combination of factors across a broad range of components and sectors

Right from the get go, we’re seeing Bullock shift the narrative to basically say “inflation is a problem” now. And that effectively puts to bed any thoughts about two-sided risks or reversing back to the easing part of the cycle again. The outlook picture that she is painting is one that the RBA has to deal with higher price pressures more than anything else moving forward.

Her remarks from the Q&A session:

We felt it was necessary today to make an adjustment
Will continuously monitor and update forecasts based on data developments
Current forecast/projection is based on the view that some factors driving up inflation is temporary
Not making any predictions, not giving any forward guidance; to remain focused on the data
No discussion about a 50 bps rate hike
A reminder that forecasts the further out you go, becomes more and more uncertain
No particular path in mind on the cash rate
And we’re going to monitor and wait, as we did when rates were on the way down
We think there’s some temporary drivers to inflation and hopefully it will come down, so that will help
I think we were doing the right thing last year but circumstances change

The point highlighted in bold is something to be wary of. Their current view is that if the factors driving up inflation is temporary, they can adopt a slower approach to hiking the cash rate through to 2027. The indirect meaning of that is if the underlying factors appear to be stronger than anticipated, then they would have to move quicker instead. So, just be wary of that.