Bendigo Bank Chief Economist David Robertson expects the Reserve Bank of Australia (RBA) to hold the cash rate steady in May, but a third rate hike for the year is likely in August, according to a Friday report from the bank.

Oil prices are expected to remain elevated, alongside a range of other key industrial and commercial products, until the reopening of the Strait of Hormuz despite a two-week ceasefire between the US and Iran.

For Australia, the impact on inflation in the wake of the Middle East conflict is being seen via the cost of petrol and diesel, Robertson said. All energy crises come with the risk of stagflation, and this conflict carries the same risk, depending upon its duration, he added.

Core inflation was only 3.3% in February, and the data for March is likely to only be marginally higher. Household spending held up reasonably in February, and spending on fuel will be higher in March, there is an expectation that discretionary spending will fall in the second quarter, Robertson said.

The "RBA will need to decide in early May if the oil crisis and related disruptions will see supply and demand dangerously out of kilter," he noted.

Most stock indices around the world, including the ASX 200, are down around 6% to 8% from their record highs just over a month ago.