Inflation data could dash the chances of another Reserve Bank rate hike as governor Michele Bullock says higher interest rates are slowing the economy down as intended. Underlying inflation has held above the central bank’s target of 2.5 per cent since the COVID-19 pandemic. “This is part of the plan,” Ms Bullock said. “This is what interest rates are designed to do. CBA head of rates research Adam Donaldson said Ms Bullock’s speech moved the bar for an August hike higher and suspected the bonds market, which rallied modestly on Tuesday, agreed.