Story perspectives

RBA Lifts Cash Rate to 4.60% Amid Inflation Risks

By Drooid · Sep 29, 2026, 10:47 AM UTC · How we work

Summary

RBA Raises Rate

RBA raised cash rate by 25 basis points to 4.60%, its fourth hike of 2026.
Core inflation sits at 3.6%, above the RBA’s 2–3% target range.
Board members said upside inflation risks materialised because of global oil supply disruptions and higher energy prices.
Markets price a 43% chance of another rate rise in November.
Board warned it will raise the cash rate further if needed to hit the inflation target.

Summary

Chalmers Blames War

The Australian dollar rose to 70.17 US cents from 70.11 after the rate decision.
Bond yields climbed while the S&P/ASX200 fell to 8,671 points from 8,697.
Treasurer Jim Chalmers blamed the U.S. war on Iran for the inflation surge.
AMP chief economist Shane Oliver warned a 35% recession risk after the fourth rate increase.

Summary

Borrowers Face Higher Payments

Variable-rate mortgage borrowers could see monthly payments rise $114 after the September cash-rate hike.
Fixed-rate home loans stay unchanged until contract end, shielding borrowers from the rate increase.
National home prices have fallen for five consecutive months, now below the March 2026 peak.
Rental shortages are identified as the main driver of rising rents, according to Dr Oliver.
Increased listings, longer selling times, and larger vendor discounts give buyers more negotiation room.

History

Historical Context

In March 1990 the Reserve Bank of Australia raised its cash rate to a record 17.0% to curb inflation, a move that later informed the March 2026 decision to lift rates to 4.60% under Treasurer Jim Chalmers and economist Shane Oliver. The 1990 episode showed steep hikes can trigger recession, shaping today’s cautionary stance.

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RBA Raises Rate

RBA raised cash rate by 25 basis points to 4.60%, its fourth hike of 2026.
Core inflation sits at 3.6%, above the RBA’s 2–3% target range.
Board members said upside inflation risks materialised because of global oil supply disruptions and higher energy prices.
Markets price a 43% chance of another rate rise in November.
Board warned it will raise the cash rate further if needed to hit the inflation target.

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