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RBA to Hold Rates as CPI Falls, Housing Costs Surge

7/29/2026

50 4 Full Breakdown

Summary

RBA Holds Rate

The Reserve Bank of Australia is expected to keep the cash rate at 4.35% at its 10-11 August meeting.
Annual CPI fell to 3.8% in the year to June, down from 4.0% in May.
Housing inflation remained high at 6.8% year-over-year, driven by electricity (+22.4%), new dwellings (+5.8%) and rents (+3.6%).
Market odds of an August rate hike dropped to about 3%-4%, far below the earlier 20%-21% level.

Summary

Australians Fear Inflation

Only 25% of 9,000 Australians surveyed said interest rates would lower inflation.
Two-thirds of respondents ranked inflation among their top three worries, especially lower-income households.
Roughly 60% mistakenly think the Reserve Bank of Australia regulates banks.
About 40% correctly identify the bank’s role in issuing banknotes and payments.
Those who listed inflation as a top concern expect their household finances to worsen within a year.

History

Historical Context

In March 1990 the Reserve Bank of Australia lifted the cash rate to a record 17 % under Governor Bernie Fraser, sparking a recession that saw unemployment hit 10.8 % and inflation fall to 7.5 %. The same year Canada’s Bank of Canada pushed its prime rate to 14.75 %, illustrating a global turn to aggressive tightening that shapes today’s cautious 4.35 % rate and 6.8 % housing-price inflation.

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RBA Holds Rate

The Reserve Bank of Australia is expected to keep the cash rate at 4.35% at its 10-11 August meeting.
Annual CPI fell to 3.8% in the year to June, down from 4.0% in May.
Housing inflation remained high at 6.8% year-over-year, driven by electricity (+22.4%), new dwellings (+5.8%) and rents (+3.6%).
Market odds of an August rate hike dropped to about 3%-4%, far below the earlier 20%-21% level.

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