RBA Keeps Cash Rate Steady, Warns Higher Rates Possible

The Reserve Bank of Australia (RBA) has held the official cash rate at 4.35% but warned that higher interest rates are 'quite possible' even if house prices continue to fall.

In a unanimous decision, the RBA board left the cash rate on pause, citing that the economy is slowing as expected. The bank's governor, Michele Bullock, stated that each board member was concerned about inflation remaining too high.

Despite holding rates steady, markets have increased their bets on another hike in Australia by the end of the year, from 53% before the decision to 69% on Tuesday afternoon.