RBA Warns Inflation Risks Materializing Amid Iran War and AI Boom

The Reserve Bank of Australia (RBA) is poised to raise interest rates in September as inflation fears come true, according to RBA Governor Michele Bullock.

Bullock told a parliamentary hearing that developments since the bank's last meeting in August suggest that some upside risks to inflation are materializing, despite slowing economic growth.

Westpac chief economist Luci Ellis has brought forward her rate rise prediction from November to September based on Bullock's testimony.

The RBA is concerned about the impact of the Iran war, the AI boom, and a strong El Nino on energy, food, and tech prices, which are driving inflation higher.

Bullock said that the bottom line is that they need to get inflation back down because if they don't, it's a worse outcome across the board.