Several members of the Reserve Bank of Australia’s monetary policy board think another interest rate rise may be required to tame inflation, according to minutes of its latest meeting that highlighted the risk of further unexpected price rises.
“Several members judged that it was quite possible that the upside risks to the inflation forecast would crystallise, requiring some further tightening,” read the minutes for the August 10 and 11 monetary policy meeting, when the cash rate was left on hold at 4.35 per cent.
“Members noted the [RBA] staff forecast that inflation would decline only gradually, returning to around the midpoint of the target range by late 2027. They observed that the risks to this projection were tilted to the upside.”
The typical closing remark in the minutes released on Tuesday – in which the board reiterated its preparedness to increase interest rates if required – was also couched in slightly stronger language than usual, with these upside risks to inflation directly linked to higher borrowing costs.
“The board will remain focused on its mandate to deliver price stability and full employment and will continue to do what it considers necessary to achieve that outcome, including increasing the cash rate target if upside risks materialise.”
Source: https://www.afr.com/policy/economy/several-rba-board-members-eye-another-rate-rise-20260825-p60r91