Bullock Signals Rate Hike as Inflation Remains Concern

Reserve Bank Governor Michele Bullock has hinted at an interest rate hike in August, citing ongoing inflation pressures. The bank's board will meet on August 10 and 11 to discuss the matter.

Bullock noted that while the full impact of previous rate hikes had yet to be felt, underlying inflation pressures remained a concern for the board. She stated that some further easing in demand growth was likely required to bring inflation back down sustainably.

Investors believe that key elements of Bullock's address suggested that inflation pressures were actually easing, leading to a rally on the ASX200 and a drop in Australian government debt rates. The Reserve Bank and markets may reassess their interest rate outlook following the release of the June inflation report on Wednesday.