It's the start of a new day at the Reserve Bank of Australia (RBA), with new governor, Michele Bullock, starting work in the central bank's top role this week.

The change which will replace that of the seven-year period of Dr Philip Lowe was announced in July. by Federal Treasurer, Dr Jim Chalmers, announced the new role.

Few people may envy Ms Bullock's new job, coming as it does amidst an extremely hectic period for the RBA - with more major shake-ups planned shortly, as we first discussed back in April.

But let's start with the basics before exploring what other changes we should expect to see in the central bank - and we're not just talking about cash rates.

Who is the new RBA governor?

A Financial Review article described Michele Bullock as being "smart, authentic and positive ... plain-spoken with a down-to-earth demeanor".

Here are some details about her:

• Ms Bullock was born in Melbourne but her family moved to the country town of Armidale, NSW, when she was nine years old
• She's spent the majority of her working life in Sydney but likes to describe herself as a "proud country girl" at heart
• She's a 60-year-old wife, and the mother of a son and daughter, who live in Grafton, NSW, and Mackay, Queensland

What is Ms Bullock's financial experience?

• Often described as an RBA "lifer", Ms Bullock has worked at the RBA since 1985, joining the central bank as an intern
• Most recently, she has held the RBA role of Assistant Governor (Currency); Assistant Governor (Business Services); and Assistant Governor (Financial System)
• Prior to the start of her new governor role, she was the RBA's Deputy Governor for around 18 months
  
• Education-wise, Ms Bullock was accepted into medicine at the University of NSW after high school
• However, she decided to study at her local University of New England, where she received a Bachelor of Economics (Honours) in 1984
• She later headed to the London School of Economics where she received a Master of Science post-graduate degree in 1989
• Ms Bullock is the RBA's first female governor in its 63-year history
  

What will the governor change mean for the RBA's future?

Unsurprisingly, this is the question most homeowners and lenders are asking, particularly after 12 interest rate rises since May 2022, along with three consecutive months wherein rates have remained unchanged.

In short, this week's new governor change equals the beginning of a big new chapter for the RBA.

According to Dr Chalmers, "Ms Bullock will oversee the implementation of the recommendations of the Review of the Reserve Bank of Australia".

Otherwise known as An RBA fit for the future, this 294-page report was presented to Dr Chalmers on March 31, 2023, and features 51 recommendations from an independent, three-panel board.

As we discussed in April, the review's main recommendation is a specialist monetary policy board (MPB), which Ms Bullock will implement.

She will also implement the review's other recommended changes.

Specialist Monetary Policy Board (MPB): what is it?

The MPB will comprise six external members who will deal exclusively with monetary details, including setting interest rates.

MPB members will also make a significant contribution to monetary decisions.

The current RBA board structure will only oversee internal governance plus currency issuances and other such tasks.

As the Financial Review put it, the RBA's new governorship will not be a one-person show, but rather, their power will be diluted to external board members, who will be encouraged to contest the bank’s internal thinking.

Plus, the MPB won't be headed by the governor, but rather, have an independent chairman similar to a listed company.

To be appointed by the Federal Treasurer, MPB members will have specialist expertise in different monetary areas.

And, rate changes will be announced eight times - rather than 11 - per year.

Former governor, Dr Lowe, announced the eight-time change in one of his final actions before leaving the job.

What will the change mean for homeowners?

Regarding interest rate changes, in particular, lenders are cautiously feeling their way when it comes to predictions and forecasts.

This is especially so in the first months of Ms Bullock's new role - and the final months of 2023.

For starters, we still don't know when the MPB and all the changes that come with it, will officially begin.

And as of Dr Lowe's final interest rate announcement on Tuesday, September 5, three of the Big 4 lenders believe the cash rate is at its peak and will not shift up - or down - further until mid-late 2024.

The June cash rate figure of 4.1% remains unchanged while the latest inflation figures showed a continuing drop to the current 4.9%.

At the same time, the RBA is still pushing for a target rate of 2%-3% although it now believes this won't be reached until late 2025.

It's also important to note that as deputy governor, Ms Bullock has essentially supported the massive 12 interest changes we've experienced since May 2022.

We at Lending Loop believe it's the perfect case of "Watch this space".

In the meantime, we’re here to help you navigate every step of the borrowing process, and we can give you important advice on when and how to complete a home loan approval application.

So, if you have any questions about your mortgage, your interest rates, refinancing or more, get in touch.