The Reserve Bank of Australia lifted the cash rate to 4.85% at its 3 November meeting, delivering a 6–3 decision. Markets interpreted the omission of any explicit reference to further increases as dovish, yet the accompanying statement still pointed to upside inflation risks and acknowledged that capacity pressures have been tighter than previously assumed.
Policy Stance and Inflation Risks
At the press conference, Governor Bullock said the Bank was keeping policy options open and did not rule out additional tightening. She also indicated that both the NAIRU and the neutral interest rate have edged higher, without providing numerical estimates.
Forward Guidance and External Uncertainties
The report set out a central case that the hiking cycle is complete and said markets are not pricing further moves in 2027, while leaving open the risk of follow-through hikes or a delayed start to easing; the first cut was pencilled in for Q3-2027. External uncertainty, elevated oil prices and spillovers from global tech spending were cited as factors favouring a wait-and-reassess approach at coming meetings.
