Bullock Signals Possible Further Interest Rate Hikes Amid Inflation Concerns

Reserve Bank of Australia (RBA) governor Michele Bullock has hinted that another interest rate increase is 'quite possible', despite the Monetary Policy Board's unanimous decision to hold the cash rate steady at 4.35 per cent.

The RBA left rates unchanged after considering only two options: a further increase or maintaining the current level, with Bullock stating that a cut was not on the table.

Bullock emphasized that the economic adjustment needed to restore price stability would be 'painful', and that a period of subdued growth in the economy would be required to bring inflation down sustainably.

The RBA's updated forecasts see inflation returning to around the middle of the 2-3 per cent target range by the end of 2027, but Bullock noted that these forecasts are uncertain and subject to change based on new information.