Experts split on whether next RBA move is a hike or cut amid energy risks
The Reserve Bank of Australia (RBA) unanimously held rates at 4.35% in August, but major economic forecasters offer varying takes on what comes next:
The Reserve Bank of Australia (RBA) maintained interest rates at 4.35% in August, sparking debate among economic forecasters on the direction of future policy. MUFG highlights external risks, citing soaring Brent crude prices due to geopolitical tensions and the closure of the Strait of Hormuz, which could lead to a global inflation shock.
This could prompt an immediate rate hike as early as September. In contrast, National Australia Bank (NAB) interprets the RBA's recent comments as signaling a cooling domestic economy, suggesting that rates will remain steady through 2026 with the first cut anticipated around mid-2027. Westpac characterizes the RBA's decision as a "hawkish hold," noting that softer inflation and labor market data have led to a more cautious stance.
Commonwealth Bank (CBA) expects the RBA to hold rates through 2026, with potential cuts beginning in 2027, while also cautioning that energy-driven inflation risks could lead to further hikes if they materialize.
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