RBA's inflation focus intensifies amid Middle East energy crisis. Reserve Bank Assistant Governor Chris Kent warned that global energy shocks from Middle East conflict risk pushing Australian inflation higher, particularly through second-round price pressures on expectations. The RBA board remains "very much focused on inflation" and aims to prevent longer-term inflation expectations from rising due to oil and commodity price increases. Kent emphasized the bank does not intend to force a recession but wants to keep the labor market shielded while inflation follows a credible downward path. His comments sparked market reaction, with Australian three-year bond yields climbing and money markets pricing over 70% odds of a May rate hike, up from 60% previously.
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