RBA's Bullock Warns of More Rate Hikes Needed to Tame Inflation

RBA Governor Michele Bullock signaled that more interest rate hikes may be needed to tame inflation in Australia. Speaking in Sydney, she noted that underlying inflation remains too high and a further slowdown in domestic demand is necessary to bring prices back down sustainably.

Bullock emphasized that the labor market also needs to cool further, and policymakers are prepared to act as required, including raising interest rates again if needed.

The RBA has already implemented three rate hikes this year, and markets expect one more hike, which would take the cash rate to 4.6%. Bullock's comments have solidified expectations for a potential August rate increase, with it being about 30% priced in.