RBA's Risk-Management Hike Fails to Spark New Tightening Cycle

The Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to 4.60% in September, but according to TD Securities Macro Research, this hike was a risk management move rather than the start of a new tightening cycle.

This view differs from the market's interpretation that the RBA is signaling a rapid follow-up hike.

The team at TD Securities expects no further RBA hikes in 2026 and for policy to remain on hold through 2027, which could lead to the Australian dollar underperforming.