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Australia's central bank flags rate hike risk as it ends brief easing cycle
The Reserve Bank of Australia kept the cash rate at 3.6%, warning inflation remains above target with a 3.8% rise in October, signaling potential hikes if pressures persist.
- Going into the new year, the Reserve Bank of Australia kept the official cash rate at 3.6 per cent and warned of mortgage pain for home buyers in Australia in 2026 if inflation persists.
- Stronger-than-Expected private sector momentum and a 'a little tight' jobs market drove the RBA's caution, warning these factors could increase capacity pressures in Australia.
- Surveys from NAB and ANZ‑Roy Morgan point to slipping business and consumer sentiment, with capacity utilisation at an 18-month high and inflation expectations highest since late 2023.
- Treasurer Jim Chalmers noted the three cuts this year saved a household with a $700,000 mortgage about $330 a month, while KPMG chief economist Brendan Rynne said chances of rapid further easing have diminished.
- In its statement, the RBA said it will be patient before moving rates again, noting fiscal policy over the coming months and a private sector demand transition will shape outcomes amid economists warning about housing-driven inflation.
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Reserve Bank of Australia Holds Interest Rates
The Reserve Bank of Australia (RBA) has kept the cash rate steady at 3.6 percent at its final meeting of the year, cautioning that inflation risks have “tilted to the upside” and signalling it would respond if price pressures persist. “The pick-up in momentum has been stronger than anticipated, particularly in the private sector. If this continues, it is likely to add to capacity pressures,” the RBA said in its post-meeting statement released on…
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Total News Sources29
Leaning Left8Leaning Right4Center4Last UpdatedBias Distribution50% Left
Bias Distribution
- 50% of the sources lean Left
50% Left
L 50%
C 25%
R 25%
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