RBA Warns of Potential Rate Hike Amid Ongoing Inflation Risks

The Reserve Bank of Australia (RBA) held its benchmark interest rate steady at 4.35% for a second consecutive meeting, but warned that it would not hesitate to raise borrowing costs again if inflation risks materialize.

RBA Governor Michele Bullock said the board actively discussed the case for another hike and would consider acting if key economic data over the coming weeks fails to align with the central bank's forecasts.

The decision was widely anticipated by financial markets and all four major Australian banks. The RBA's updated forecasts show inflation slowing to 2.6% by the end of 2027, but Bullock noted that there are upside risks to inflation, particularly amid ongoing tensions in the Middle East.