RBA Sounds Alarm on Rising Inflation Risks Amid Oil Price Spikes

The Reserve Bank of Australia's (RBA) governor Michele Bullock has warned that inflation risks are increasing due to rising oil prices, the Middle East conflict, and a global AI investment boom.

According to Bullock, these factors are pushing up costs and could embed inflation more deeply in the economy. The RBA has already raised interest rates to 4.35%, but is assessing whether this is enough or if further rate hikes are needed.

The central bank expects higher rates to slow growth and reduce inflation, which it does not expect to return to target until late 2027.