Australian Economists Warn of Further Rate Hikes Amid Inflation Concerns

Investors in Australia may be feeling a sense of relief after this week's inflation report, which showed benign numbers. However, some economists are warning that interest rates could still rise.

KPMG chief economist Brendan Rynne believes the economy is running too hot and needs further cooling down. He points out that other countries like Canada and New Zealand have seen demand start to slow down, but Australia has not yet reached this point.

Rynne's warning comes as investors may be thinking they can breathe a sigh of relief after the benign inflation report. However, Rynne is cautioning that the economy still needs more tightening.

The higher costs related to the conflict in the Middle East are also expected to contribute to further interest rate hikes this year.