“To achieve this, growth in aggregate demand needs to remain subdued to reduce capacity pressures and bring inflation back to target.” Governor Michele Bullock said last month that a further slowdown in the economy may be required to bring inflation down. Swaps imply around a 40 per cent chance of another rate increase this year, down from 50 per cent before the decision. “Assuming the bank keeps policy at its current restrictive setting, capacity pressures should eventually ease in earnest.” The RBA now expects inflation to move back into the target band in the second half of next year.