Where's the cash rate needle sitting?
The Reserve Bank lifted the cash rate on Tuesday 29 September, just as every major bank had predicted. Here's what happened, what it means for a mortgage, and what's expected on Melbourne Cup Day.
The board voted unanimously for the 25bp rise, and all four major banks passed it on to variable-rate borrowers in full. Next decision: Tuesday 3 November.
Market Watch
What happened on 29 September
The RBA's Monetary Policy Board raised the cash rate by 25 basis points to 4.60% — its fourth rise of 2026 and the highest cash rate since November 2011. The decision was unanimous. In its statement the Board said "inflation remains elevated" and that upside risks it flagged in August were materialising: global energy prices are much higher than assumed in its August forecasts as Middle East supply disruption continues, and recent Australian inflation came in stronger than expected.
The Board also noted the slowdown is real — housing prices have fallen in most capital cities, new housing loans have declined noticeably, consumer spending growth is easing and the labour market has eased broadly as expected. But it kept the door open, saying it will do what it considers necessary to bring inflation back to target, "including increasing the cash rate target further if needed."
The consensus had flipped in the weeks before: Brent crude pushed above US$100 a barrel, July CPI and Q2 GDP both printed stronger than the RBA expected, and Governor Michele Bullock had told a parliamentary committee that upside risks to inflation appeared to be materialising. CBA Economics had called it a near-unanimous decision while flagging the case to hold was "not one sided".
How the big four's calls going into the meeting played out:
Next Meeting
Looking ahead: Tuesday 3 November
The Board meets 2–3 November and announces its decision on Melbourne Cup Day, alongside the RBA's updated quarterly forecasts in the Statement on Monetary Policy. With a week and a half to go, the big four are split two-all and markets see it as roughly a coin toss. Updated 23 October.
Told a Sydney investment conference on 21 October that the inflation outlook is worse than the RBA forecast, warning against a "central banker's nightmare" where people stop believing inflation will return to target. He conceded unemployment was a little weaker than expected.
Sticking with a hold, arguing slowing household spending and a housing market with turnover 20–30% lower than a year ago justify a pause — but says the last stretch of getting inflation down is proving difficult.
Market odds of a November hike fell below 20% after September's jobs figures, then jumped to around 51% after Hauser's speech. Goldman Sachs and UBS have joined Westpac and ANZ in tipping a rise.
What to watch before then: the September-quarter inflation figures from the ABS on Wednesday 28 October — the big swing factor, with CBA and ANZ both pencilling in core inflation of about 1% for the quarter. Against that, unemployment rose to 4.7% in September, a five-year high, after nearly 40,000 jobs were lost. For a typical $550,000 variable loan, another 0.25% would add roughly $90 a month — use the repayment calculator for your own numbers.
Independent Voices
Beyond the big four
Views from independent economists, research houses and academics gathered in the lead-up to the 29 September decision. They broadly agreed with the banks on direction — though not always on how far, or what it costs the economy.
Reinstated her forecast for one final RBA hike after stronger inflation data, calling the decision "finely balanced." National dwelling prices fell 0.9% in August — a fifth straight monthly decline — and William Buck now expects prices to fall 5% for 2026 overall, with rate cuts from mid-2027.
Put the odds of a September move at 70% versus November, noting the earlier hikes were already "starting to slow" housing, consumer sentiment and business conditions — "just not slow enough yet for the RBA." AMP saw the cash rate peaking at 4.60%, with cuts possible in the second half of 2027.
Told The Australian in September that the RBA would probably hike again before long, perhaps that month — an independent read that lined up with the shift in bond markets weeks before the banks moved.
Argued inflation expectations remain broadly anchored, and that it would likely take clearly negative economic news — not just a sticky quarterly print — to shift the RBA back toward cutting in 2026.
The most bearish voice in the mix: with sentiment already this negative, he argued a September hike — and especially a follow-up in November — was "very likely" to tip the economy into recession.
Sources: RBA, "Statement by the Monetary Policy Board: Monetary Policy Decision" (29 Sep 2026), cash rate target & board meeting schedule (rba.gov.au); Westpac Economics, "RBA hikes, retains hawkish language" (Luci Ellis, 29 Sep 2026); ABC News live coverage of the decision and press conference (29 Sep 2026); Mortgage Professional Australia (1 Oct 2026); CBA Global Economic and Markets Research, "RBA to hike in September, risk sits with still higher rates" (21 Sep 2026); NAB Economics, "Monetary Policy Update" (27 Aug 2026); Westpac and ANZ economics teams via Aussie, Canstar and Mortgage Professional Australia reporting (Sep 2026); William Buck, "Housing downturn deepens as weakness spreads" (Besa Deda, 1 Sep 2026); AMP economic commentary (My Bui, Livewire Markets, Sep 2026); Capital Economics via The Australian; Prof. James Morley, University of Sydney, via Finder economist survey; Alan Kohler via The Nightly. ABS Wage Price Index, June quarter 2026 (released 19 Aug 2026); ABS Consumer Price Index, July 2026 (released 26 Aug 2026). Big four November calls and market odds via Aussie (6 Oct 2026), CommBank Newsroom (19 Oct 2026), Switzer and ABC News (21 Oct 2026). Archived as published on 23 October 2026; it has not been updated since.