RBA's Hauser Warns of Rate Hikes Amid Inflation Risks

Reserve Bank of Australia Deputy Governor Andrew Hauser warned on Wednesday that interest rates could rise if inflation risks materialize. Speaking in Queensland, Hauser highlighted three upside risks to inflation: the Middle East conflict, the global AI boom, and poor productivity.

The RBA has already hiked interest rates by 75 basis points since February to combat stubborn inflationary pressures. However, it held interest rates steady at 4.35% for a second meeting last week.

Hauser emphasized that inflation in Australia remains too high, and the central bank will need to take action if these risks crystallize.