Bullock Signals Further Rate Hikes as Oil Prices Remain High

RBA Governor Michele Bullock signaled that the central bank is considering further tightening as oil prices remain high, adding to inflation risks.

Bullock told investors on Thursday evening that businesses are now more inclined to pass on cost increases, a key concern for the RBA. This is in line with her earlier testimony to the House of Representatives Standing Committee on Economics, where she said upside inflation risks flagged in August are materialising.

The recent drop in housing prices is not significant enough to sway policy decisions, according to Bullock. She downplayed its impact, saying it's 'not that big' in the scheme of things.

The RBA's next decision falls on September 28-29, and a further 25 basis point hike is currently priced at around 70 to 75%. Bullock's comments suggest that this probability may increase, as she explicitly stated that the Board is thinking about whether policy is tight enough.