The Reserve Bank of Australia has set out, in unusually plain terms, the three things most likely to keep Inflation elevated. Speaking on the ABC's 7.30 programme on 8 September 2026, Deputy Governor Andrew Hauser distilled the central bank's concerns into a single sentence: "There are three risks we think that might mean inflation is going up, not down."

Those risks are the crisis in the Middle East, an unexpected artificial-intelligence-driven global Investment boom, and a weakening in Australia's own capacity to Supply goods and services. Each pulls on prices in a different way, but together they help explain why the Reserve Bank has held the cash rate at 4.35 per cent and warned it could rise further. Here is what each risk means for households and businesses.

What the RBA Said

Mr Hauser framed the three risks as reasons the inflation path could disappoint. He acknowledged that recent inflation had come in "a little stronger than we'd expected" and that growth had been "a bit stronger" too. He also posed the question the Board is wrestling with: "have we done enough or is more needed?"

At the same time, he offered a measure of reassurance, saying inflation was "due to be back in target by the end of next year" while stressing it remained "too high" for now.

The August Statement on Monetary Policy carried the same message in the Bank's forecasts. Inflation is not expected to return to the middle of the 2 to 3 per cent target band until around early 2028, and the risks around that path are skewed to the upside.

The Key Numbers

Inflation: 3.5% headline, 3.6% trimmed mean. Cash rate: 4.35%. September hike odds: ~67%. Inflation expected in band by end-2027.

What Could Happen Next

Analysis of the Bank's own language suggests the September decision will hinge on which of these risks is intensifying. In its 11 August statement, the Board said it would raise rates further if upside risks materialised, and both Mr Hauser and Ms Hunter have echoed that conditionality.

Importantly, not all three risks are things monetary policy can address. Ms Hunter was explicit that the Bank "can't do anything about global oil prices" using interest rates. What it can do is keep domestic Demand and supply in balance so that a one-off price shock does not become embedded through what economists call second-round effects.

The AI boom cuts both ways. Some of the equipment involved, such as racks, servers and wiring, is imported, which means part of the spending leaks offshore rather than adding to domestic pressure. Ms Hunter said it was "still pretty early to know the size of that" effect.

Markets and economists will be watching the next inflation and labour figures closely for evidence that any of the three risks is crystallising.

Conclusion

The Reserve Bank's three-part warning is a useful map of where the pressure on prices is coming from: an external energy shock, a global investment wave, and a domestic supply squeeze. None is guaranteed to lift inflation, and Mr Hauser still expects prices back in target by the end of 2027. But with underlying inflation near 3.5 per cent and the risks skewed higher, the Bank has made clear it is prepared to act again if the outlook worsens. The 28 to 29 September meeting will be the next test of its resolve.