RBA Governor Warns More Rate Hikes Needed to Tame Inflation

Reserve Bank of Australia Governor Michele Bullock has warned that more interest rate hikes may be necessary to combat inflation, which currently sits at 4% and remains above the central bank's target range of 2-3%. This is despite three previous rate hikes implemented earlier this year.

The weak productivity growth in the economy continues to constrain inflation and has left Bullock stating that monetary policy can't address this issue directly. The slow economic growth has led to concerns about the effectiveness of future rate hikes in reducing inflation.

According to Bullock, another rate increase could push the cash rate to a 15-year high of 4.6%, while underlying inflation remains elevated at 3.6%. The central bank has stated that it is prepared to act as required to achieve its mandate, including increasing the cash rate further if needed.