RBA Holds Rates at 3.6% as Inflation Concerns Persist

Australia's central bank maintained its benchmark interest rate at 3.6%, a MOVE widely anticipated by markets and economists. The pause follows three earlier cuts this year, reflecting heightened caution amid resurgent inflation. Housing, food, and alcohol prices drove a second consecutive monthly inflation increase in August, signaling potential service-sector pressures.

RBA Governor Michele Bullock noted the economy is performing 'a bit stronger' than expected, with near-full employment and strengthening private sector activity. Yet she emphasized the bank remains data-dependent, with future decisions tied to real-time inflation, jobs, and wages metrics.

Market focus now shifts to the timing of potential cuts. Westpac and Bloomberg Economics project rates could dip below 3% by late 2026 if economic slowing forces the RBA's hand. The standstill at 3.6% hasn't quelled debate about the bank's next move—only delayed it.