RBA flags possible rate hike this year if inflation stays outside 2%–3% band
AI Market Summary
RBA assistant governor Sarah Hunter signaled rising inflation concern and reduced tolerance for inflation remaining outside the 2%3% target band, keeping another 2026 rate hike on the table. With cash rate at 4.35% and July inflation at 3.5% (above expectations), bank economists are increasingly leaning toward a September/November hike. This reinforces higher-for-longer Australian yields, supporting AUD and tightening domestic financial conditions.
Impact level
● Medium
Affected assets
NCFXAUD2USD/USDT+0.06%
AI Insight · NCFXAUD2USD/USDTAI Insight
▼ Bearish
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An RBA assistant governor said the central bank’s concerns about inflation are intensifying and signalled it could lift rates again this year if price growth remains outside its 2%–3% target range. The cash rate is currently 4.35%. Although July inflation eased to 3.5%, it was still above expectations. Markets are now pricing the first rate cut as late as August 2027.
