Most economists and investors expect the Reserve Bank of Australia to lift interest rates when it announces its cash rate decision at 2.30pm today.
A rate rise would take the official cash rate target to 3.85%, up from 3.6%, marking the first increase since November 2023. Any move is expected to flow through to mortgage rates in coming weeks.
Higher-than-expected inflation in the December quarter is the key factor behind expectations the RBA’s nine-member monetary policy board will reverse course after delivering three rate cuts during 2025.
The board must be confident inflation is heading back towards the midpoint of its 2–3% target band within a reasonable timeframe before holding rates steady.
The RBA will release updated economic forecasts alongside the decision in its quarterly Statement on Monetary Policy, including how many board members voted for a rate hike or a hold.
Governor Michele Bullock is due to address the media at 3.30pm, where attention will turn to whether further rate rises may follow.
Separate data shows national home prices rose 0.8% in January and are up 9.4% over the past year, despite expectations of higher borrowing costs. Lending to property investors also accelerated in January, reaching its fastest pace in more than 18 years.
