The central bank delivered another super-sized rate hike in September but economists expect future rate rises to be more restrained.
The Reserve Bank of Australia hiked interest rates by 50 basis points on Tuesday, bringing the official cash rate to 2.35 per cent.
The latest rate hike comes ahead of GDP figures on Wednesday, with quarterly growth rates expected to remain steady despite the interest rate rises.
In a statement about the latest rate rise, RBA Governor Philip Lowe said the board was committed to returning inflation to between its target band of two to three per cent while "keeping the economy on an even keel".
"The path to achieving this balance is a narrow one and clouded in uncertainty, not least because of global developments," Dr Lowe said.
"The board expects to increase interest rates further over the months ahead, but it is not on a pre-set path."
He also said household spending remained an "important source of uncertainty".
Several economists noticed the governor had stopped referring to the "normalisation of monetary policy".
KPMG economist Brendan Rynne said this suggests the cash rate was close to the RBA's expectations of a "neutral rate" - a level where the cash rate neither stimulates nor contracts economic activity.
On the other hand, the RBA did say more further rate rises were to come.
"It has no target level - only that it will adjust the cash rate as needed to achieve its inflation target, subject to data and prevailing economic conditions," Dr Rynne said.
"So it would seem reasonable to expect another 25 basis point rise next month and then a pause by the RBA as it enables the official data to catch up and allows it to assess how prices and wages are flowing through into domestic inflation."
The RBA governor also noted the disconnect between consumer spending and rate rises.
However, CommSec economist Ryan Felsman said rate hikes would eventually trigger thriftier behaviour.
"While consumers have remained resilient due to the accumulation of savings, strong job market and mid-year store sales, depressed sentiment surveys imply that households are likely to rein in their consumption in the coming months," Mr Felsman said.
Treasurer Jim Chalmers said the cash rate decision would "tighten the screws on family budgets".
"The markets had anticipated it and homeowners were expecting it as well but the fact that we knew it was coming doesn't make it any easier for people," he said in parliament.
Shadow treasurer Angus Taylor said the Albanese government had no plan to ease cost of living pressures.
"Instead it wants to reintroduce industry-wide bargaining, industry-wide disputes and strikes which will ultimately lead to higher unemployment, less profitability within businesses and a negative impact overall on the Australian economy," Mr Taylor said.
The Greens called for the RBA governor to resign for "misleading Australians about interest rate rises".
"Dr Lowe induced hundreds of thousands of Australians into taking out massive mortgages by effectively saying that interest rates would not rise until 2024," Greens economic justice spokesman Senator Nick McKim said.
"Having failed to keep that commitment, he should now resign."
The Housing Industry Association said the RBA risked pushing the cash rate too high.
HIA economist Tom Devitt said the effect of increasing interest rates is being obscured by the strength of the housing market.
He said the significant pipeline of building activity was acting as a buffer against rate increases.
"With long lead times in this current cycle there is a greater risk that the impact on unemployment of a rapid rise in the cash rate will be obscured and that the RBA will overshoot with unnecessary rate increases," Mr Devitt said.
The Australian Bureau of Statistics also released trade figures on Tuesday, with high commodity prices, particularly coal and natural gas, driving an improvement in the trade balance.
