Australia's RBA May Hike Again; IMF Warns Inflation Risks Persist

The IMF cautioned that the RBA's 4.35% cash rate may not represent peak levels, citing persistent underlying inflation and uncertainty over restrictive financial conditions. Markets currently price an 80–87% probability of a further 25bp hike. Oil price volatility adds upside risk to inflation expectations, keeping rate-hike optionality alive for the central bank.