RBA Rate Stalemate: Experts Split on Next Move Amid Energy Risks
The Reserve Bank of Australia (RBA) maintained its interest rate at 4.35% in August, but experts disagree on what's next.
Some forecasters, such as MUFG, warn that severe external risks could trigger a global inflation shock due to spiking Brent crude prices driven by US pressure on Iran and the closure of the Strait of Hormuz.
This could force the RBA to hike rates as soon as September, with markets already pricing in a full hike by next March.
On the other hand, National Australia Bank (NAB) expects steady quarterly GDP growth at 0.3-0.4% with rates staying on hold through 2026, followed by a first rate cut around mid-2027.
Westpac characterizes the decision as a 'hawkish hold', noting that softer inflation and labor market data forced the Board to tone down its explicit tightening bias.