RBA Governor says if second round effects move through to expectations it could result in a need for higher rates. Current cash rate is a "bit" restrictive, provides some space to see how the Middle East situation develops

The RBA Governor's comments suggest a cautious stance, indicating that if second-round effects escalate inflation expectations, higher rates may be necessary.

Newsquawk StaffPublished 5 May 2026, 05:53 UTCOn the live feed at 05:33 UTC, 20 minutes before this page

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RBA Governor says if second round effects move through to expectations it could result in a need for higher rates. Current cash rate is a "bit" restrictive, provides some space to see how the Middle East situation develops

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Have the policy space to wait and see.
Extensive debate about the decision to hike.

Context

Currently, the cash rate is deemed somewhat restrictive, granting the RBA room to monitor geopolitical developments before proceeding with policy adjustments. This stance reflects both a wait-and-see approach and the potential for rate hikes depending on evolving economic signals, especially regarding Middle Eastern tensions.

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