RBA Signals More Rate Hikes Ahead Amid Oil Price Volatility

The Reserve Bank of Australia (RBA) warned that more interest rate hikes may be needed to control inflation, as the Middle East oil crisis continues to push prices higher.

RBA governor Michele Bullock said underlying inflation has evolved broadly as expected since May but is still too high. She noted that after three rate rises since February, the labour market has eased somewhat and demand growth has been moderating, but further easing in demand is needed to bring inflation sustainably back to target.

Bullock stated that a key question for the RBA is whether the tightening of monetary policy earlier this year is sufficient to achieve its mandate. She emphasized that the board is prepared to act as required to achieve its mandate, including by increasing the cash rate further if needed.