The RBA raised rates to 4.85%, but a split board and softened guidance have led markets to price out further tightening, pressuring the Australian dollar despite long-term inflation concerns.
The RBA raised its cash rate to 4.85% but softened guidance on further hikes, with a 6–3 vote and concern over unemployment and housing. Markets price no additional hikes and modest cuts by late 2027, undermining the Australian dollar despite the hike. Inflation above 3% until end-2027 provides a counterargument for more tightening.
Yes, the RBA raised its cash rate to 4.85%.
OIS pricing implies no additional RBA hikes and even modest cuts by late 2027.
The Reserve Bank of Australia lifted its cash rate to 4.85% in a split 6-3 vote, signaling a cautious path forward. Despite persistent inflation forecasts above 3% through 2027, market participants are pricing in no further hikes and potential rate cuts, weighing on the Australian dollar.
The RBA raised the cash rate to 4.85% in a 6-3 vote, while softening its guidance on future policy tightening.
Despite inflation projections remaining above 3% until 2027, the board's focus on housing and unemployment risks has led markets to price in no additional hikes and modest cuts by late 2027.