Kent Flags Inflation Risks, Warns of Further Rate Hikes

RBA Assistant Governor Christopher Kent delivered a more hawkish tone in his comments at the Reuters Next event on Wednesday, aligning himself with Governor Michele Bullock's view that inflation risks lean to the upside.

Kent emphasized the uncertainty around this assessment and raised the possibility of further cash rate hikes if those upside risks materialize.

He pointed to weak productivity growth as a specific factor complicating the inflation fight, saying productivity has been very disappointing and makes the central bank's task materially harder.

Kent also commented on financial markets, stating that valuations in some equity markets seem very generous, adding a layer of caution to the broader risk picture.