RBA expected to raise cash rate to 4.6% next week, fourth hike in 2024
The Reserve Bank of Australia is expected to raise its cash rate by 25 basis points to 4.6% at its September 28-29 meeting, with money markets pricing a 90% probability. This would be the fourth rate hike in 2024, driven by surging energy prices and persistent inflation risks. Major banks including ANZ, UBS, and Commonwealth Bank have revised forecasts, with some expecting rates to reach 4.85%, the highest since 2008. RBA Governor Michele Bullock stated upside inflation risks "appear to be materializing."
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Energy price surge fuels inflation risk, RBA set for fourth rate hike in 2024 next week
Market pricing indicates a 90% probability that the Reserve Bank of Australia (RBA) will raise its cash rate by 25 basis points to 4.6% at its September 28-29 meeting, which would be the fourth rate hike this year. The expected move is driven by rising energy prices and persistent inflation risks. Economist James McIntyre, who previously expected rates to remain unchanged through 2026, now warns that hawkish signals suggest the RBA's patience is wearing thin and that energy cost increases may be passed on to consumers. Major banks have revised their forecasts: ANZ expects another hike in September and maintains a November hike forecast; UBS now expects consecutive hikes in September and November, with the key rate reaching 4.85% (the highest since 2008); and Commonwealth Bank has moved its rate hike expectation from November to next week, citing Brent crude oil prices above $100 per barrel. RBA Governor Michele Bullock noted that upside inflation risks 'appear to be becoming reality,' while Assistant Governor Sarah Hunter highlighted the impact of Middle East conflict on oil prices and fuel costs. Australia's high per capita diesel consumption is also cited as a factor, with freight companies likely passing on higher diesel costs through fuel surcharges.
Read sourceEconomist Says RBA Set to Hike Next Week, Warns of November Follow-Up
According to a report from tradealpha on September 22, the Reserve Bank of Australia (RBA) is expected to raise its key interest rate next week, with a warning that a further hike may follow in November. The anticipated tightening is driven by surging energy prices, which are making upside risks to inflation more pronounced. Economist James McIntyre, who previously forecast the RBA would hold rates steady for the remainder of 2026, has revised his outlook in a report titled 'RBA Insight: Energy Shock Puts RBA Back on Rate Hike Track.' He states that repeated hawkish signals indicate the central bank's already limited patience is nearly exhausted. McIntyre warns that further increases in energy costs could prompt businesses to pass on higher input costs to consumers, fueling inflation.
Read sourceEconomist Says RBA Set to Raise Key Rate Next Week, May Follow Up in November
According to a report from financial data provider Jin10, the Reserve Bank of Australia (RBA) is expected to raise its key interest rate next week, with a potential further hike in November. This forecast comes from economist James McIntyre, who previously expected the RBA to hold rates steady through the remainder of 2026. In his report titled 'RBA Insight: Energy Shock Puts RBA Back on Rate Hike Track,' McIntyre argues that repeated hawkish signals indicate the central bank's limited patience is nearly exhausted. Surging energy prices are making upside risks to inflation more pronounced, potentially prompting businesses to pass higher input costs on to consumers. The analysis suggests the RBA is returning to a tightening cycle due to the energy price shock.
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Energy Price Surge Fuels Inflation Risk, RBA Expected to Deliver Fourth Rate Hike Next Week
Economists predict the Reserve Bank of Australia (RBA) will raise its key interest rate by 25 basis points to 4.6% at its September 28-29 meeting, with a roughly 90% probability priced in by money markets. This would be the RBA's fourth rate hike this year, driven by rising energy prices that are exacerbating inflation risks. Analysts from ANZ, UBS, and Commonwealth Bank have revised their forecasts, with some expecting rates to reach 4.85%, the highest since 2008. RBA Governor Michele Bullock stated that inflation upside risks 'appear to be becoming reality,' and Assistant Governor Sarah Hunter noted that the Middle East conflict is impacting oil prices. Economist James McIntyre warned that higher diesel costs, given Australia's high per capita consumption, could be passed on to consumers via fuel surcharges.
Read sourceAustralia's Major Banks Expect RBA to Raise Rates by 50 Basis Points by Year-End
On September 21, major Australian banks, including ANZ and Commonwealth Bank, have reached a consensus that the Reserve Bank of Australia (RBA) will raise interest rates by an additional 50 basis points before the end of the year. This shift follows hawkish remarks from senior central bank officials last week. Belinda Allen, an economist at Commonwealth Bank, stated that recent RBA communications and market pricing support the case for acting sooner than expected. She added that given the inflation backdrop, the risk is that further monetary policy tightening will be required after September, though she noted this is not an easy decision to make. The convergence of major banks on this outlook signals a significant shift in market expectations for Australian monetary policy.
Read sourceAustralia's Major Banks Expect RBA to Raise Rates by 50 Basis Points Before Year-End
Major Australian banks, including ANZ and Commonwealth Bank, have reached a consensus that the Reserve Bank of Australia (RBA) will raise interest rates by an additional 50 basis points before the end of the year. This shift to hawkish expectations follows recent hawkish remarks from senior central bank officials. Belinda Allen, an economist at Commonwealth Bank, stated that recent RBA communications and market pricing support the case for acting sooner than expected. She added that, given the inflation backdrop, there is a risk that further monetary policy tightening will be required after September, though she noted this is not an easy decision to make. The report, sourced from Jin10 Data on September 21, highlights the converging views among Australia's largest financial institutions on the trajectory of monetary policy.
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