Hauser Sounds Alarm: Inflation May Demand Further Rate Hikes

RBA Deputy Governor Andrew Hauser has sounded a fresh warning about inflation, saying it may require further interest rate hikes to get under control. The Reserve Bank of Australia (RBA) has already raised the cash rate three times this year, but with inflation remaining above target and economic growth stronger than expected, there is growing pressure for more action.

Hauser identified several areas of concern, including the conflict in the Middle East, rapid global investment in artificial intelligence, and weak productivity growth. He emphasized that the RBA's primary focus remains bringing down inflation to its 2-3 per cent target range.

The comments come as major bank economists increasingly converge on another cash-rate increase this year. Westpac has abandoned its extended-hold forecast and now expects a 25-basis-point hike in November, while National Australia Bank (NAB) forecasts a similar increase at the September board meeting. Macquarie Bank tips a 25-bp increase to 4.60 per cent after the RBA's September meeting.