“RBA interest rates: Reserve Bank holds cash rate at 4.35% but threatens more hikes if needed”

What actually happened

The RBA board unanimously held the cash rate at 4.35%, a widely expected outcome after three earlier hikes this year. Governor Michele Bullock told reporters the board had discussed raising rates and that a further hike was "quite possible," while stressing the decision would depend on incoming data. Markets responded by lifting the implied probability of another 2026 hike.

Key facts

• Cash rate held at 4.35%, unanimous board vote, decision matched economist and market expectations.
• Bullock: "I think personally that it's quite possible we might need to go but we'll wait and see what the data tells us."
• Market-implied odds of another hike by year's end rose from 53% before the decision to 69% after.
• RBA forecasts inflation returning to the 2.5% target only by early 2028, even with rates edging up.
• Unemployment forecast revised up to 4.7% by end-2027, despite stronger expected jobs growth.
• Deloitte's Stephen Smith read the same forecasts as suggesting the RBA "increasingly feels its job may be done," a more dovish take than the headline implies.

What to watch for

• Whether the next inflation print pushes the RBA toward actually acting on Bullock's "quite possible" language, or whether it proves to be jawboning to anchor expectations.
• The tension between the headline's hawkish framing and Deloitte's contrasting "job may be done" read: coverage over the following weeks should show which interpretation the data supports.
• Datacentre-driven construction demand pulling workers from housing, which Bullock flagged as a fresh inflation risk worth tracking in the next statement.