Bullock Signals Possible Rate Hike Amid Inflation Fears

Reserve Bank of Australia (RBA) governor Michele Bullock has hinted that she may support another interest rate hike to combat rising inflation. Speaking at a recent event, Bullock emphasized that while she only has one vote on the nine-member monetary policy board, she wants to highlight the risks of entrenched inflation and its potential impact on the economy.

Bullock pointed out that the Middle East conflict is having a prolonged effect on global markets, leading to excess demand in the Australian economy. She highlighted that even though the RBA has already raised interest rates four times this year, it's essential to consider further increases to curb inflationary pressures.

The futures market now predicts an 88% chance of another rate hike, with the big four banks expecting the cash rate to reach a 15-year high of 4.6%. Bullock stressed that she cannot disclose her personal voting intentions but emphasized the need for tighter monetary policy to mitigate inflationary risks.