Monetary tightening implemented by the Reserve Bank of Australia may be insufficient to return inflation to the target in a reasonable time. Governor Bullock identified a broad agreement that the neutral interest rate has increased and noted that upside risks assessed at the August board meeting are now materializing as firms pass on higher input costs.

Labor market conditions remain slightly tighter than full employment, though growth in the Australian economy is slowing. Deputy Governor Hauser confirmed the board remains fully committed to hitting the inflation target, while Bullock warned that persistent inflationary shocks are difficult to look through.