RBA's Hunter Warns Another Rate Hike Possible Amid Elevated Inflation Risks
Reserve Bank of Australia Assistant Governor Sarah Hunter has warned that another interest rate hike may be needed to tame inflation. Speaking on Tuesday, Hunter said that while the RBA's August decision to leave the cash rate unchanged was a balance between easing economic growth and persistent inflationary pressures, the risks to inflation are still skewed to the upside.
Hunter noted that the economy is facing several sources of price pressure, including elevated energy costs, strong demand relative to supply, and constraints in sectors such as construction. She also highlighted that there were 'lots of reasons' why inflation could prove higher than the RBA's current forecasts.
The central bank has raised its cash rate three times and expects tighter policy to help bring inflation back towards its target. However, Hunter emphasized that the board would consider another hike if those risks materialize.