Australia's Rate Outlook Shifts as Markets Bet on Potential 2026 Hike

Deep News
6 hours ago

Strong economic data, rising inflationary pressures, and warnings from the Reserve Bank of Australia (RBA) about economic resilience have triggered a major reassessment of interest rate expectations.

Swap markets now price just a 5% chance of further rate cuts by May 2026, compared to 40% before October's unexpectedly high inflation report. Meanwhile, bets on a potential rate hike by late 2026 have surged to nearly 30%.

National Australia Bank now projects the RBA could debate raising rates as early as the first half of 2026.

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