FX.co ★ Inflation Risks Persist: RBA June Minutes

The minutes from the Reserve Bank of Australia’s June 15–16 meeting highlighted ongoing concern that inflation remains well above target, with underlying price pressures expected to intensify in the June quarter. Policymakers pointed to widespread labor cost pressures and subdued sentiment among households and businesses, even as activity data indicated that the economy is cooling. After three rate increases this year, the board signaled that further tightening remains possible, arguing that restrictive policy and elevated oil prices could dampen demand and support economic rebalancing. Headline inflation slowed to 4.0% in May from 4.2% as fuel prices declined, but core inflation picked up, with the trimmed mean rising to 3.6% from 3.4% as firms passed through higher costs linked to tensions in the Middle East. Although the board discussed the potential for easing regional tensions, it warned that “global commodity supply constraints would take some time to resolve,” even if a durable settlement is achieved.