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RBA Gov. Michele Bullock says inflation remains too high, leaves door open to rate hikes

RBA Gov. Michele Bullock says inflation remains too high, leaves door open to rate hikes

Bullock said inflation remains above the RBA’s 2%-3% target ahead of the June CPI report and the Aug. 11 policy meeting, with oil-price risks, weak productivity and a softer housing market complicating the outlook.

Fact Check
The primary RBA speech transcript (28 July 2026) directly confirms Bullock said inflation remains too high, left the door open to further tightening ('prepared to tighten policy further if required'), and cited oil/fuel-cost pass-through, weak productivity, and a softer housing market as complicating factors. WSJ corroborates the 'threat of higher rates' framing. BBH confirms the next decision is August 11 with hike odds priced in. The RBA's 2-3% target band is standard. The only slight imprecision is that the speech stresses underlying inflation (headline was 4% in May), but this supports rather than contradicts the claim's substance.
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Summary

Reserve Bank of Australia Governor Michele Bullock said underlying inflation remains too high and signaled the central bank could raise rates again if needed as policymakers assess whether demand is cooling enough to return inflation to the 2%-3% target band. Speaking in Sydney on Tuesday, Bullock said it is still unclear whether the three interest rate hikes delivered between February and May will be sufficient because their full effect has yet to flow through the economy. She warned that higher oil prices linked to the Iran conflict could feed through to broader costs, said more businesses are indicating they plan to pass those costs on to consumers, and stressed that the labor market still needs to cool further. Headline inflation was running at 4% in May, and financial markets are pricing in a full additional rate hike this year that would lift the cash rate to 4.6%, with roughly a 30% probability of a move at the Aug. 11 meeting. A newer topic appears to describe a different event involving the U.S. Federal Reserve and does not match the underlying RBA story.

Terms & Concepts
  • underlying inflation: A measure of price pressures that excludes more volatile items to show the broader inflation trend.
  • cash rate: The Reserve Bank of Australia’s benchmark interest rate, which influences borrowing costs across the economy.
  • productivity growth: An increase in how much output an economy produces for a given amount of labor or other inputs.