Households are being warned to brace for more interest rate rises, in a bid to get inflation under control.

Reserve Bank Governor Philip Lowe addressed the American Chamber of Commerce in Australia, admitting that further rate rises will start to impact mortgage holders.

In June, the RBA lifted the nation’s interest rates for the second month in a row, to 0.85 per cent.

Dr Lowe also said he doesn’t see a “recession on the horizon” here.

“As we chart our way back to 2-3 per cent, Australians should be prepared for more interest rate increases,” he said.

“I want to emphasise though that we are not on a preset path, how fast we increase interest rates and how far we need to go, will be guided by incoming data.”

Lowe says next month’s RBA board meeting will likely have a discussion between a 0.25pp and a 0.5pp rate increase…

— Shane Wright (@swrighteconomy) June 21, 2022

Lowe pouring cold water on fin market pricing of a 4% cash rate by end of year. Says that would have first order impact on the economy. “I don’t think it’s particularly likely”. But then notes the market has done a better job on rate pricing than the bank…

— Shane Wright (@swrighteconomy) June 21, 2022