SYDNEY--Money markets should have little confidence that the Reserve Bank of Australia is finished raising interest rates.

Gov. Michele Bullock made that clear at a press conference after the central bank's policy-setting board voted unanimously Tuesday to hold the official cash rate at 4.35%.

Bullock appeared determined to challenge the view in money markets--and among an increasing number of bank economists--that the RBA is pretty much done raising rates after three increases earlier this year.

She said it was "quite possible" that interest rates will need to go higher, while highlighting the potential for ongoing supply shocks stemming from war in the Middle East, and persistently high inflation.

Bullock added that the outlook for interest rates was not balanced, while providing an explicit warning that she may not be done tightening the screws of monetary policy.

Adding to her hawkish commentary, Bullock said falling house prices didn't yet pose a threat to financial stability.

Bullock previously worked on the financial-stability side of the RBA, making her comments notable. They came just hours after ANZ said that it now expects capital-city house prices to fall by more than 10% in the current downturn, with Sydney and Melbourne particularly hard hit.

The RBA doesn't target house prices, but it is unlikely to ignore a meltdown in house prices severe enough to rattle the nation's banks and stall consumer spending.

Westpac said Monday that mortgage applications had fallen 20% since May, when the federal government announced that a tax concession supporting property investment would be withdrawn.

Bullock will know that if stubborn inflation frustrates the RBA in coming months, the central bank could raise rates again. If it does, forecasts for house-price declines are likely to deepen.

"Governor Bullock's press conference appeared to walk back the perceived lack of hawkishness from the board," said Justin Fabo, economist at Antipodean Capital, adding that her comments were "clearly less sanguine than the board's statement."

Bullock acknowledged that the board discussed a rate increase and said another might eventually be needed.

Still, the bar for it being delivered looks high, said Peter Dragicevich, economist at Corpay.

Markets appear to agree, with just 17 basis points of further RBA tightening priced into the Australian interest-rate curve by next March.

Still, Bullock's message could take time to sink in.

"While the board chose not to tighten policy further today, this should be viewed as a hawkish pause, not a signal that the tightening cycle has ended," said Cherelle Murphy, EY Oceania's chief economist.