The chairman of the Reserve Bank of Australia warned on Tuesday that potential inflation is still too high and may require a further slowdown in domestic demand to curb prices, and said policymakers are prepared to raise interest rates again if necessary. In a speech in Sydney, Reserve Bank of Australia Governor Michelle Bullock said that one key uncertainty is whether the three rate hikes implemented this year will be enough to bring the inflation rate back to the target range of 2%-3%. Although the full impact of these rate hikes on the overall economy is yet to be seen, Bullock pointed out that potential inflation is still too high, and as the rise in oil prices associated with the war in Iran spreads to wider costs, inflation is likely to rise further. “This means that if we want to keep bringing inflation back to target levels, we may still need to further mitigate demand growth,” Bullock said. The labor market also needs to cool down further, she added. “The Commission is prepared to act as necessary to fulfill its responsibilities, including further increases in cash interest rates if required.”

The chairman of the Reserve Bank of Australia warned on Tuesday that potential inflation is still too high and may require a further slowdown in domestic demand to curb prices, and said policymakers are prepared to raise interest rates again if necessary. In a speech in Sydney, Reserve Bank of Australia Governor Michelle Bullock said that one key uncertainty is whether the three rate hikes implemented this year will be enough to bring the inflation rate back to the target range of 2%-3%. Although the full impact of these rate hikes on the overall economy is yet to be seen, Bullock pointed out that potential inflation is still too high, and as the rise in oil prices associated with the war in Iran spreads to wider costs, inflation is likely to rise further. “This means that if we want to keep bringing inflation back to target levels, we may still need to further mitigate demand growth,” Bullock said. The labor market also needs to cool down further, she added. “The Commission is prepared to act as necessary to fulfill its responsibilities, including further increases in cash interest rates if required.”