RBA holds rates at 4.35%, signals further hikes still possible - recap

CBA sees RBA on hold for rest of 2026 after third consecutive hike to 4.35%

The desk anticipates that the Reserve Bank of Australia (RBA) will maintain its cash rate at 4.35% for the remainder of 2026, with potential rate cuts beginning in 2027. This outlook is supported by Commonwealth Bank's recent analysis, which highlights inflation concerns and a downgraded GDP forecast. Per the full note [source], the RBA's decision to raise rates for the third consecutive time reflects a cautious approach to monitoring economic developments, particularly in light of inflationary pressures stemming from energy costs. The desk notes that the market's current pricing may not fully reflect the potential for an August rate hike if inflation data surprises to the upside.

Westpac sees upside inflation risks after RBA lifts cash rate to 4.35% in 8-1 vote

The desk sees the RBA's recent rate hike as a signal of persistent inflation pressures, particularly influenced by geopolitical factors. Per the full note [source], the RBA raised its cash rate by 25 basis points to 4.35%, with an 8-1 vote reflecting a stronger consensus than the previous meeting. However, the dovish tone from Governor Bullock suggests that while further tightening is possible, the June meeting could see a pause. This nuanced stance is critical as it indicates a balancing act between combating inflation and acknowledging potential economic headwinds.

RBA raises cash rate to 4.35% in May monetary policy meeting, as expected

The Reserve Bank of Australia (RBA) has raised its cash rate to 4.35% in the May monetary policy meeting, a move anticipated by market participants. Per the full note [source], traders had priced in approximately 85% odds of a 25 basis point increase, with expectations for a total of around 61 basis points of hikes by year-end. This decision aligns with the broader trend of central banks tightening monetary policy in response to persistent inflationary pressures. As the RBA continues to navigate these economic challenges, market reactions will be closely monitored for further directional cues.

RBA leaves cash rate unchanged at 4.35% in June monetary policy meeting, as expected