Australia central bank warns hikes are not off the table as it keeps rates steady at 4.35%
The central bank said future moves will depend on incoming data as inflation stays above target and growth has slowed.
- On Tuesday, the Reserve Bank of Australia unanimously held the cash rate at 4.35%, pausing after three consecutive 2026 hikes. Governor Michele Bullock warned that future rate increases remain possible if inflation data fails to moderate as expected.
- Persistent inflation, driven by global oil supply disruptions following the Middle East conflict, prompted the board's cautious stance. While oil prices have eased slightly, the RBA warns that energy costs continue exerting upward pressure on goods and services.
- Treasurer Jim Chalmers welcomed the stability, noting the pause offers relief to millions of mortgageholders struggling with repayments. However, households still face higher costs from three earlier hikes this year that added nearly $300 monthly to a $600,000 mortgage.
- Compare the Market Economic Director David Koch urged Australians to actively manage their finances by switching lenders. Koch warned that loyalty to banks rarely pays off, advising borrowers to seek better offers to mitigate elevated interest rates.
- Ebury economist Anthony Malouf expects the RBA to maintain the current cash rate through early 2027 to balance growth risks against inflation. Canstar Data Insights Director Sally Tindall cautioned that borrowers who fail to negotiate could pay thousands in extra repayments.
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Tightening bias under steady rates – BNY
BNY’s Bob Savage highlights that the Reserve Bank of Australia kept its cash rate unchanged at 4.35% but maintained a clear tightening bias. The Australian central bank emphasized that further rate hikes remain possible if inflation pressures persist. This stance keeps policy expectations skewed toward additional tightening rather than cuts in the near term. Australian policy steady with hawkish tilt “The BoJ delivered a hawkish 25bp hike to 1.0…
Australia central bank warns rate hikes might not be over
Australia's central bank held its cash rate steady at 4.35% today, saying the economy was slowing in the face of tighter financial conditions but warned it might yet hike again if needed to control inflation.

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