CBA Predicts RBA to Keep Interest Rate Steady Until 2026 Amid Cooling Inflation

Australia's largest lender, Commonwealth Bank of Australia (CBA), has forecast that the Reserve Bank of Australia will keep its key interest rate steady at 4.35% until 2026.

The prediction comes as inflation in Australia cools down, with the country's consumer price index rising only 3.8% over the past 12 months to June, which is below expectations.

CBA economist Belinda Allen pointed out that there is 'little need to tighten further' due to more slack in the job market and broader measures of spare capacity being at their highest level since December 2021.

However, CBA also warns that if inflation picks up again and the economy doesn't slow as expected, the RBA may hike interest rates as soon as November this year.