Reserve Bank governor Michele Bullock could soon face stern test

During his seven years in the position, Ms Bullock's predecessor Philip Lowe had experienced his fair share of interrogations that at times veered into the testy, almost ill-tempered, territory - particularly when it came to his ill-conceived 2021 call that interest rates would remain low until 2024.

Ms Bullock was at Dr Lowe's side during many of these appearances so is familiar with how the heat can rise during questioning, even though the words may remain civil.

And she is also well practiced at how to navigate the potential pitfalls involved in responding to questions alluding to future interest rate decisions.

One of the qualities cited by Treasurer Jim Chalmers in announcing Ms Bullock's appointment was her skill as a communicator and those qualities were evident during an assured performance by the governor before the Senate Economics Legislation committee.

She gave short shrift to any suggestion that the government's budget policy was adding to the inflation problem, speaking with approval about what she saw as the "very positive" move by the government to bank most of the revenue windfall from company and income taxes.

The governor also gave clear and jargon-free explanations about why she didn't think companies were engaging in price gouging, what was driving up rents (demand exceeding supply), the nation's productivity problem, the impact of increases in 10-year bond yields at home and abroad, the performance of the Chinese economy, state deficits and youth unemployment.

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She deftly ducked the invitation to reflect on how the September quarter inflation rise might influence the central bank's interest rate deliberations on Melbourne Cup Day, saying that the RBA was still assessing the numbers.

When senators put to her propositions she did not agree with, the governor did not hesitate to put them in her own terms and explain why her conclusion was different.

And Ms Bullock was happy to share the spotlight with Assistant Governor Christopher Kent, referring several questions doing the 90-minute appearance to him.

If the governor is still in the honeymoon period of her new role, it may very soon end.

If, as is widely tipped by economists and the markets, the Reserve Bank hikes interest rates next month, some of the opprobrium heaped on Dr Lowe through 12 rate rises will start to land on her.