RBA’s Bullock: Inflation Driven by Domestic Capacity Pressures, More Hikes Possible

Bullock is reframing Australia's inflation problem as domestic and structural rather than imported, which matters because it removes the excuse that external shocks will fade on their own. That framing justifies keeping policy tight for longer, and it lands hardest on rate-sensitive borrowers and anyone pricing Australian risk. The Middle East is treated as a secondary shock layered on top, not the root cause. Whether domestic capacity pressures actually ease, and whether the RBA follows through on the threat of further hikes, is the open question.