RBA Holds at 4.35%, But Will It Last?

The Reserve Bank of Australia (RBA) held its cash rate target at 4.35% in a unanimous decision after three hikes earlier this year.

The decision was based on softer-than-expected June quarter CPI data, which showed inflation at 3.8%, below the levels that would have made another hike necessary.

RBA Governor Michele Bullock kept the door open to further tightening in her statement, saying inflation is still too high and the board is prepared to act if upside risks materialise.

The market is currently pricing a 90% probability of another hold on September 29, but the RBA's language suggests it could hike again.