RBA Warns Interest Rates Will Rise If Inflation Risks Materialize

Australia's central bank will raise interest rates if inflation risks materialize, according to Deputy Governor Andrew Hauser. Speaking at an event in Queensland, Hauser highlighted three upside risks to inflation: the Middle East conflict, the global AI boom, and poor productivity.

The Reserve Bank of Australia (RBA) has already increased interest rates by 75 basis points since February to combat stubborn inflationary pressures. The RBA held its interest rate steady at 4.35% for a second meeting last week.

Hauser warned that if these risks crystallize, the RBA would need to take action to rein in inflation. He emphasized that inflation in Australia remains too high.