RBA Warns Inflation Remains Too High Amid Oil Market Volatility

RBA Governor Michele Bullock warned that Australia's inflation rate may be too high and could require further interest rate hikes to bring it under control. In a speech, she stated that underlying inflation had evolved broadly as expected since May but remained too high.

The RBA has raised interest rates three times since February, but Bullock noted that the labour market had eased somewhat and demand growth was moderating. However, further easing in demand is needed to bring inflation sustainably back to target.

The oil market's volatility, particularly due to the conflict between the US and Iran, is also a concern for the RBA. The recent re-escalation in the conflict means oil prices are likely to stay elevated in the short term, posing a substantial threat to global inflation.