Standard Chartered Sees RBA Hiking Cash Rate Amid Inflation Fears

Standard Chartered's Nicholas Chia has revised his forecast for the Reserve Bank of Australia (RBA) to raise the cash rate to 4.60% at its 29 September meeting, surpassing the cycle high of 4.35%. This prediction comes after recent RBA messaging highlighted concerns about upside inflation risks and resilient economic momentum.

According to Chia, the RBA is highly attuned to materialising inflationary pressures, which include oil prices near triple digits and the AI boom adding to price pressures. The central bank is likely to consider its current policy stance as modestly restrictive despite three previous rate hikes.

The forecast also pushes back the expected start of RBA rate cuts to Q3-2027 from Q1-2027, with Chia citing a cautious view on incoming data and awaiting sustained evidence of below-trend growth before considering policy easing.