RBA Expected to Hold Cash Rate as Major Banks Predict No Further Hikes

The Reserve Bank of Australia (RBA) is expected to hold its cash rate at 4.35 per cent next week, according to major banks Commonwealth Bank of Australia (CBA), Australia and New Zealand Banking Group (ANZ), Westpac, and National Australia Bank (NAB).

CBA senior economist Belinda Allen said the RBA will retain a hawkish tone and reiterate its willingness to hike rates if inflation accelerates. However, with consecutive softer-than-expected inflation outcomes, the hurdle for another increase is now higher.

ANZ and Westpac also forecast an extended hold, while NAB has dropped its expectation of an August rate hike, saying the next move in the cash rate will be down. The bank currently forecasts the cash rate will end 2027 at 3.6 per cent.