The Reserve Bank of Australia raised its cash rate to 4.35% in May, the third consecutive 25-basis-point hike. Minutes suggest the RBA may pause to assess the Iran conflict's inflationary impact.
The board voted 8-1 for the hike, noting financial conditions would become somewhat restrictive. This gives room to monitor Middle East developments and household responses.
ANZ analysts believe a June hike is less likely, expecting rates to stay at 4.35% for a prolonged period.
Fuel prices, which surged due to the US-Israel attack on Iran, are adding to inflation. Australia was already facing a resurgence in inflation in late 2025.
