RBA delivered a risk management hike – TD Securities

TD Securities Macro Research’s Reserve Bank of Australia (RBA) note argues that the September 25bps hike to 4.60% was a risk-management move rather than the start of a new tightening cycle. The team expects no further RBA hikes in 2026 and for policy to remain on hold through 2027.

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"We stick with our call for no further RBA hikes this year and for the Bank to be on hold for all of 2027. "

"Overall, our read of the Statement was that the RBA delivered a risk management hike without explicitly signaling a rapid follow-up hike. In this regard we differed from the market's hawkish interpretation of the Statement."

"If the RBA does not hike in November, then the option of having to hike in December would be a difficult and an uncomfortable one. The RBA would be loath to deliver this."

"While our base case is for the RBA to keep the cash rate on hold at 4.60%, there is a risk the RBA may need to reconsider hiking again at its Feb'27 meeting. This is not our central view and from a market perspective not a view worth positioning for right now, but one worth considering."