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Australia's central bank chief warns inflation risks materialising
Bullock said oil, AI investment and extreme weather are pushing prices higher, with markets pricing an 82% chance of a September rate hike.
- On Friday, Reserve Bank of Australia Governor Michele Bullock warned that upside inflation risks—the Middle East conflict, an AI investment boom, and extreme weather—are materializing, prompting markets to reprice rate hike expectations sharply higher.
- Persistent inflationary pressures stem from prolonged Middle East energy disruptions, extreme weather events, and demand driven by the global AI investment boom, complicating Bullock's path to returning inflation to the 2–3% target band.
- Bond futures have priced in an 82 per cent probability of a 0.25 percentage point interest rate hike at the board's September 28–29 meeting, which would lift the official cash rate to 4.6%.
- A further rate increase would push the cash rate to its highest level in 15 years, increasing costs for households with an average $736,000 mortgage who would pay $542 more monthly than in January 2026.
- Economists and market indicators suggest current policy may not sufficiently curb persistent inflation, with UBS Group AG projecting the cash rate could reach 4.85%—the highest since late 2008—if further tightening is required.
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·Nicosia, Cyprus
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Total News Sources52
Leaning Left7Leaning Right11Center9Last UpdatedBias Distribution41% Right
Bias Distribution
- 41% of the sources lean Right
41% Right
L 26%
C 33%
R 41%
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