Michele Bullock New RBA boss has full agenda

Dr Lowe was at it again on Tuesday, warning that "significant uncertainties around the outlook" mean that some further tightening of interest rates may be necessary.

And it is not an empty threat.

Some economists, such as Deutsche Bank's Phil Odonaghoe and Centre for Independent Studies chief economist Peter Tulip think more rate increases will probably be needed - Mr Odonaghoe tips two more before the central bank is done for this tightening cycle.

Just a few months ago this was a relatively common view. But now it is much less so.

The sustained slowdown in inflation that has occurred so far this year, both in Australia and overseas, in combination with mounting evidence of weakening demand, has many now thinking that interest rates have peaked.

Markets have begun pricing in rate cuts, albeit not until well into next year. Some economists say they may come as soon as next March or April.

If this proves to be the case, it might be tempting to think incoming governor Michele Bullock will have the easiest of introductions to the top job.

In a central banker version of bad cop-good cop, Dr Lowe will have incurred the wrath of borrowers whose finances have been crunched by 12 rates hikes, leaving it to Ms Bullock to be the (eventual) agent of better times.

IN OTHER NEWS:

Unfortunately for her, things are unlikely to be this smooth.

For one thing, there is the little detail of inflation still stuck well above the 2 to 3 per cent target band for an extended period, the chance that rising wages or house prices could hold it higher for even longer than currently expected and possibility that China throws a big spanner in the works of the global economy.

On top of her regular 'day job', Ms Bullock also has the task of shepherding in the reforms called for in the RBA Review, not least bringing to fruition the idea of a external panel of experts to advise on setting monetary policy and shaping the central bank's culture to be more contested. It is a full dance card.