Summary
Markets are pricing a 92-94% probability of a 25bp RBA rate hike on Tuesday 29 September 2026 — the highest probability of any RBA meeting this year — if delivered, the cash rate moves from 4.35% to 4.60%; all seven major banks now forecast a September hike, including CBA and Westpac who shifted their calls forward from November following Governor Bullock’s comments and RBA Assistant Governor Sarah Hunter’s hawkish statement this week; ANZ is the most hawkish of the four, forecasting both a September and November hike that would take the cash rate to 4.85% by year-end
RBA Assistant Governor Sarah Hunter confirmed the RBA’s concern this week — in a public statement, Hunter said the board is worried that inflation has been “too high for too long” and could become entrenched; she added: “We can see lots of reasons why inflation might be a bit higher than what we currently think”; the statement drove market pricing from approximately 86% to 92-94% and was the clearest signal yet of the board’s intention ahead of Tuesday’s meeting
The decisive data before the meeting is the August employment data, releasing Thursday 24 September at 11:30am AEST — July 2026 showed employment fell 15,800 and unemployment rose to 4.5%; a strong August rebound would cement the hike; a further weak print would introduce some doubt, though with probability at 92-94%, only a very large miss would be likely to change the outcome; the August CPI releases Wednesday 30 September — one day after the RBA decision and too late to influence the vote
The decision
Meeting: RBA Monetary Policy Board Date: Tuesday 29 September 2026 Announcement: 2:30pm AEST Current cash rate: 4.35% If hike: 4.60%
Why markets are pricing a near-certain hike
1. Stubborn core inflation
Australia’s trimmed mean inflation — the RBA’s preferred measure — remained at 3.6% in July 2026, unchanged from June. Headline CPI eased to 3.5% (from 3.8% in June), but the stickiness of underlying inflation is the key concern for the board.
The RBA’s target band is 2-3%. At 3.6% trimmed mean, inflation remains well above target — and the downward trajectory has stalled.
2. Strong economic growth
Australia’s Q2 2026 GDP came in above expectations — confirming that the economy has not been slowed enough by the existing rate settings to bring inflation back to target on its own.
3. Global tightening context
The Federal Reserve hiked by 25bp to 3.75-4.00% on 16 September — unanimously. The ECB hiked to 2.50% on 10 September. With the RBA already the highest of the major central banks at 4.35%, the global tightening context makes a hold look relatively dovish.
4. Sarah Hunter’s statement
RBA Assistant Governor Sarah Hunter confirmed this week that the board believes inflation risks could push the cash rate higher. Her statement — “We can see lots of reasons why inflation might be a bit higher than what we currently think” — was the clearest pre-meeting signal from any board member this cycle.
What the banks are forecasting
| Bank | September forecast | Peak rate view |
|---|---|---|
| NAB | ✅ Hike to 4.60% | One more after September |
| Deutsche Bank | ✅ Hike to 4.60% | Data dependent |
| UBS | ✅ Hike to 4.60% | Data dependent |
| Morgan Stanley | ✅ Hike to 4.60% | Data dependent |
| CBA | ✅ Hike to 4.60% | Hot CPI could push to 4.85% |
| Westpac | ✅ Hike to 4.60% | Split board vote expected |
| ANZ | ✅ Hike to 4.60% | November hike also — 4.85% by year-end |
CBA: Brought its call forward from November to September, citing sharp oil price rises, already-strong CPI and GDP data and increasingly hawkish RBA commentary. Expects a unanimous board decision but flags that a hot September-quarter inflation print (releasing 30 September) could push the cash rate as high as 4.85%.
Westpac: Moved from November to September after Governor Bullock’s comments “met the condition the Board had set in August for further action.” Expects the board’s vote to be split — reflecting internal disagreement over labour market slack and productivity.
ANZ: The most hawkish of the big four — forecasting hikes in both September and November, taking the cash rate to 4.85% by year-end.
The August employment data — Thursday 24 September, 11:30am AEST
The last major data point before Tuesday’s decision releases Thursday morning.
July 2026 context:
- Employment fell 15,800 (-0.1%)
- Unemployment rose to 4.5% (from 4.4% in June)
- Full-time employment rose 16,300
- Part-time employment fell 32,200
The July softening was the data point that brought hike probability down from approximately 80% to 66-68% in early September — before the subsequent recovery to 92-94%.
For the September hike: With probability at 92-94%, employment data would need to show a very large miss — significant job losses and a sharp rise in unemployment — to meaningfully shift the board’s thinking at this point. A modest soft print is unlikely to change the outcome.
Update: This post will be updated once the August employment data is released Thursday morning.
What a hike means for mortgages
A 25bp hike from 4.35% to 4.60% adds approximately the following to monthly mortgage repayments (assuming lenders pass it on in full):
| Loan size | Additional monthly repayment |
|---|---|
| $400,000 | ~$51/month |
| $600,000 | ~$76/month |
| $800,000 | ~$101/month |
| $1,000,000 | ~$127/month |
Whether lenders pass the full increase on — and how quickly — varies by lender. Not all lenders move immediately or in full.
The 2026 RBA rate timeline
| Meeting | Decision | Cash rate |
|---|---|---|
| February 2026 | Hold | 4.35% |
| March 2026 | Hold | 4.35% |
| April 2026 | Hold | 4.35% |
| May 2026 | Hold | 4.35% |
| June 2026 | Hold | 4.35% |
| July 2026 | Hold | 4.35% |
| August 2026 | Hold | 4.35% |
| 29 September 2026 | Decision Tuesday | 4.60% if hike |
| November 2026 | Next meeting | TBD |
Global context — where Australia sits among major central banks
| Central bank | Rate | Last decision |
|---|---|---|
| RBA | 4.35% | Hold — August 2026 |
| Federal Reserve | 3.75-4.00% | +25bp — 16 September 2026 |
| Bank of England | 3.75% | Hold 6-3 — 17 September 2026 |
| ECB | 2.50% | +25bp — 10 September 2026 |
| RBNZ | 2.75% | +25bp — 2 September 2026 |
If the RBA hikes to 4.60%, Australia will extend its lead as the highest cash rate among major central banks — 60bp above the Federal Reserve’s upper bound and 210bp above the ECB.
What it means for your transfers
A higher Australian cash rate attracts foreign capital into AUD assets — a factor that has supported AUD/USD above 0.72 in recent weeks. If the RBA hikes as expected, AUD support at current levels is likely to continue in the near term.
FAQs (frequently asked questions)
When is the RBA decision in September 2026?
Tuesday 29 September 2026 at 2:30pm AEST.
What is the RBA expected to do on 29 September 2026?
Markets are pricing a 92-94% probability of a 25bp rate hike — taking the cash rate from 4.35% to 4.60%. All seven major banks are forecasting a September hike.
What is Australia’s current cash rate?
4.35% — unchanged since the August 2026 meeting.
What would a 25bp hike mean for my mortgage?
Approximately AUD $76/month extra on a $600,000 variable-rate loan — assuming lenders pass the full increase on.
What happens after September?
ANZ is forecasting a November hike too — taking the cash rate to 4.85% by year-end. CBA notes a hot Q3 CPI (releasing 30 September, the day after the decision) could also push the rate to 4.85%. Other banks are data dependent after September.
This article is based on market pricing and bank forecasts as of 23 September 2026. The RBA decision publishes Tuesday 29 September at 2:30pm AEST — this post will be updated with the confirmed result. Exchange rates and probabilities fluctuate. Last updated 23 September 2026.
Sources: rateprobability.com — RBA rate probability (23 September 2026) | FXStreet — RBA’s Hunter backs more hikes as inflation risks entrench (22 September 2026) | Finimize — RBA opens the door to another rate hike (22 September 2026) | aussie.com.au — Expert predictions for the RBA’s September 2026 decision (2 weeks ago) | thebull.com.au — Will RBA raise rates in September? (2 weeks ago) | centralbank.watch — RBA rate probability (current) | ABS — Labour Force Australia, August 2026 release date confirmed 24 September 2026
