Reserve Bank of Australia interest rate decision: The outlook for domestic economic activity and inflation remains highly uncertain

The resolution of the Middle East conflict is still in its early stages, and there is a reasonable scenario in which inflation remains above, and activity falls below, the benchmark forecasts for May. Issues with global oil supply will take some time to resolve, which will keep upward pressure on global energy prices and inflation. At the same time, a period of uncertainty may also lead to slower economic growth for Australia’s major trading partners and for Australia itself.