RBA Set for Decisive Rate Hike Amid Ongoing Economic Strength

The Reserve Bank of Australia (RBA) is expected to raise interest rates by 25 basis points on September 29, taking the cash rate to 4.6%. This decision comes as the economy continues to show signs of strength across multiple fronts.

Labor market conditions remain tight, with second-quarter GDP growth exceeding expectations. Recent inflation readings have also come in stronger than anticipated.

While the housing market has started to cool down, the RBA is likely to emphasize that inflation risks remain skewed towards the upside and that further vigilance is necessary to ensure prices return sustainably to target.