RBA Warns Inflation Remains Too High Amid US-Iran Conflict

RBA Governor Michele Bullock warned that inflation remains too high, despite underlying inflation evolving broadly as expected since May. She noted that the labour market has eased somewhat and demand growth has been moderating, but further easing is needed to bring inflation sustainably back to target.

Bullock's comments came ahead of a crucial inflation print, which is expected to show trimmed mean inflation at 3.6% for the June quarter. This figure is still above the Reserve Bank's target range and may lead to more interest rate hikes.

The recent escalation in the US-Iran conflict has pushed global oil prices higher, with Brent crude falling back below $90 a barrel on Tuesday. Treasury warned that oil prices are likely to stay elevated in the short term due to the ongoing dispute over control of the Strait of Hormuz.