RBA Governor Sounds Alarm on Inflation Risks in Australia
RBA Governor Michele Bullock sounded the alarm on inflation risks in Australia, citing high energy prices and strong domestic demand as key contributors to price pressures. Speaking at a business lunch, Bullock pointed out that the prolonged Middle East conflict has led to sustained excess demand in the economy.
The governor emphasized that unemployment rates of 4.5% to 5.0% could help bring down inflation, but noted that domestic demand continues to outstrip supply, pinning higher prices on this imbalance.
Bullock clarified that she is not signaling an interest rate hike next week, but rather highlighting the upside risks to inflation, which has been a concern for her and the RBA. The bank has already hiked interest rates by 75 basis points so far in 2026, taking them to 4.35%.
RBA Assistant Governor Sarah Hunter echoed this sentiment, suggesting that interest rates might need to rise again to ensure inflation is controlled.