Bullock's Rate Hike Warning Sends Shockwaves Through Australian Markets

The Reserve Bank of Australia (RBA) kept interest rates steady at 4.35% on Tuesday, in line with market expectations.

The decision was accompanied by new quarterly forecasts that projected inflation would fall below 2.5% within two years.

This news initially pared down future rate rise expectations among money market traders, but RBA Governor Michele Bullock's comments threw them off balance again.

'Personally', Bullock believed another interest rate increase may be warranted, contradicting the softer economic forecasts presented earlier in the day.