RBA Hunter on Oil Price Pass Through and Inflation Outlook

RBA Assistant Governor Hunter warns that oil price shocks will impact inflation faster and more deeply given the capacity-constrained Australian economy. Goldman Sachs expects a 25bp rate hike in June to 4.60% in response to these dynamics.

Key Takeaways

• 1.RBA Assistant Governor Hunter expects oil price shocks to pass through to inflation more quickly and extensively than in the past due to current economic capacity constraints and changed price-setting behaviors.
• 2.Goldman Sachs maintains its forecast for a further 25bp hike to 4.60% in June 2026, though risks are skewed toward a later increase.
• 3.The RBA has significantly upwardly revised its headline inflation forecasts for the June quarter to 4.8% as a result of direct oil price impacts.

Table of Contents

• Bottom line
• Main points
• The Australia and NZ Economics Team
• Disclosure Appendix
• Global product; distributing entities
• General disclosures

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