The Reserve Bank of Australia kept rates steady but warned inflation risks could trigger another increase if upside pressures materialize.
The Reserve Bank of Australia maintained its cash rate at 4.35% in a unanimous decision, aligning with market expectations. While the statement and updated forecasts appeared less hawkish than anticipated, Governor Michele Bullock emphasized that another rate hike remains possible if inflation risks escalate.
The RBA’s revised projections do not include a rate hike as its central scenario, suggesting a higher threshold for further tightening this year. However, trimmed mean CPI forecasts for Q3 and Q4 imply quarterly prints of 0.8%, signaling persistent inflation concerns.
Markets remain sensitive to incoming data and RBA communications, as the central bank’s stance hinges on evolving inflation dynamics.