Reserve Bank of Australia weighs rate hike as June inflation data due

Reserve Bank of Australia (RBA) Governor Michele Bullock said the central bank’s recent interest‑rate hikes are deliberately slowing demand, and highlighted that inflation has stayed above the 2–2.5% target since the COVID‑19 pandemic. The upcoming trimmed‑mean inflation figure for the June quarter, expected to be around 3.7% according to analysts, will be released by the Australian Bureau of Statistics on Wednesday. Bullock warned that a prolonged oil‑price shock from the Middle East conflict could make price pressures more entrenched and further complicate the RBA’s job of bringing inflation under control.

Markets have trimmed expectations for an additional rate rise in August after Bullock’s remarks, with HSBC Australia chief economist Paul Bloxham noting that demand is already easing. The board may remain patient, observing the economic slowdown caused by three rate hikes since February and a cooling housing market, while still keeping policy tight. Commonwealth Bank of Australia rate‑research head Adam Donaldson said the speech raised the bar for an August hike.

The data will be critical in deciding whether the RBA proceeds with further tightening or holds rates steady.