RBA Holds Fire on Interest Rates, But Hints at Future Hike

The Reserve Bank of Australia (RBA) kept interest rates on hold as expected, but Governor Michele Bullock hinted that another rate hike could be in store if inflation data suggests it's needed. The RBA believes the inflation peak has passed and prices will only slow down for the rest of the year.

Bullock emphasized that the board is closely watching for evidence of upside risks to inflation materializing, and a fourth rate hike this year is still on the table if required to bring inflation down in a timely way. The RBA's monetary policy board discussed a rate hike on Monday and Tuesday, but not a cut.

The big four banks expect the RBA to hold rates steady for now, but traders are still pricing in one more increase in the next 12 months. Consumer finance expert Joel Gibson pointed out that even with interest rates at their highest level since 2011, households are still feeling the squeeze due to high mortgage repayments and rising living costs.