Bullock Warns Higher Interest Rates May Be Needed Amid Rising Inflation Risks

RBA Governor Michele Bullock has highlighted growing inflation risks in Australia, citing both external and domestic factors. The central bank's thinking is increasingly pointing towards higher interest rates for a longer period.

Bullock noted that inflation risks are materializing from the Middle East and excess demand at home, making it challenging for the RBA to 'look through' some of the direct impact from an external energy shock.

The Governor's comments suggest that further tightening may be on the horizon. The next policy meeting is scheduled for 29 September, with markets currently pricing in around 95% odds of a 25 bps rate hike.