After a turbulent run of hikes earlier this year, the RBA has held the cash rate steady at 4.35% through both its June and August 2026 meetings, but “steady” doesn’t mean “settled.” The outlook remains uncertain, with the central bank continuing to monitor inflation and broader economic conditions closely.

Headline inflation is expected to have peaked around 4.8% in the June quarter, though underlying (trimmed mean) inflation, the RBA’s preferred gauge is projected to stay above the 2-3% target band until at least mid-2027. That’s the crux of the challenge: price pressures are proving stickier here than in most comparable economies.

The major banks broadly agree the hiking cycle is done, though the RBA hasn’t ruled out another move if conditions warrant it. All four now expect the first cuts from mid-2027 rather than this year a shift from earlier, more optimistic calls for 2026 relief.

For the next 12 months, the most likely path is: no cut before mid-2027, with the cash rate probably parked in the low-to-mid 4% range through Q2 2027. As one economist noted, Australians should expect the RBA’s approach to stay data-dependent rather than follow a fixed path the realistic scenario is rates on hold for longer, with any easing gradual.

What this means practically?

• Mortgage holders shouldn’t bank on near-term relief, budget for elevated rates into 2027.
• Savers continue to benefit from stronger deposit returns.
• Property and investment decisions should be stress-tested against “higher for longer,” not an imminent pivot.

The one certainty in this outlook is uncertainty itself, watch the quarterly CPI prints closely, as they’re driving every recalibration.