RBA may raise rates again if inflation risks materialize

The article says the Reserve Bank of Australia (RBA) is keeping open the option of another rate hike if upside inflation risks become reality. Deputy Governor Andrew Hauser highlighted three key risks: Middle East conflict, the global AI boom, and weak productivity. The central bank held rates at 4.35% after already lifting them 75 basis points since February, but said further tightening remains possible. Markets are pricing about a 60% chance of another move to 4.60% by December. The broader market backdrop is driven by higher oil prices, which have reached three-week highs and may reinforce inflation concerns, while Australia’s economy is already slowing and housing is weakening. Overall, the message is hawkish for rates, supportive for the Australian dollar in theory, and negative for rate-sensitive assets if tightening expectations rise.