Original article by Michael Read
The Australian Financial Review – Page: 1 & 6 : 30-Sep-26

Reserve Bank of Australia governor Michele Bullock has reiterated that "domestic capacity pressures" have been the key driver of the inflation rate, rather than the Iran war. She notes that while the conflict in the Middle East has "made things much worse", there was already excess demand in the economy and the RBA had started increasing the cash rate before the war began. Treasurer Jim Chalmers has persistently claimed that the war has been the primary source of Australia’s inflation challenge, rather than government spending. Bullock has warned that the RBA may need to follow up yesterday’s increase in the cash rate with another one if it is to prevent high inflation from becoming embedded across the economy. Financial markets have fully priced in a rise in the cash rate by February 2027.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY