A Summary of Some Economists’ Views On RBA Monetary Policy
- Published on
- 05 Dec 2025, 02:30 PM
(This article was first published on December 5, 2025 at 12:06 PM)
By Sophia Rodrigues
(Sydney, December 5, 2025) – A quick summary to highlight a shift in economists’ thinking about the outlook for the Reserve Bank of Australia’s cash rate.
ANZ Bank: Earlier this week, the bank formally shifted its call to Hold for an extended period from a rate cut in 1H2026. This morning, the bank flagged the risk of a rate hike.
“Given recent inflation pressure, we no longer see a rate cut from the RBA in the first half of 2026 and expect the cash rate to remain at 3.60% for an extended period. As for the next move in rates, we can construct scenarios where it could be up or down. That said, in the wake of the Q3 national accounts, the risks of a rate hike in the first half of 2026 are rising.”
Regarding the upcoming meeting, the bank expects inflation concerns to drive a more hawkish tone in the statement and Governor Michelle Bullock's press conference. “In the highly unlikely event that policy does change, a hike next week would surprise us less than a cut given the recent data flow.”
UBS: The investment bank reminds it was the “first to call” the “next move is up” with forecast for a first hike by 4Q2026 made on November 26. Recent data have added to upside risks and “the RBA may hike the cash rate earlier, or by more, compared with our already hawkish view.”
“Looking ahead, we will assess our view on the RBA, after their next Board meeting on December 9,” UBS wrote.
Westpac: The bank is sticking to its view for two more cash rate cuts in 2026 but slightly softened its view by pointing to the risk of hold for longer.
“The risk to our base case is quite obviously that the RBA stays on hold for longer. If we are right about supply capacity, though, the Australian economy will not hit the wall of capacity constraints. And that means the RBA risks keeping interest rates too high for too long,” Westpac wrote.
National Australia Bank: NAB’s base remains the RBA will remain on hold in 1H26 (on Nov 20, it said “on hold for the foreseeable future”), but is now preparing for a shift towards a more hawkish tone. The forecast will be under review.
“It is quite possible that the RBA may need to deliver what we would characterise as a modest recalibration of the policy stance at some point in 1H26. This recalibration is likely to be in the order of 50bp.”
NAB highlights “time is of the essence. It is better to move earlier, and by less, than to wait and to be forced to do more.”
CommBank: The bank doesn’t expect the Board to shift too much next week, and thinks,
“At this stage, we and the RBA estimate the majority of the higher inflation print has been temporary.”
The base view remains for the hold in December and through 2026. At the same time, the bank believes, “If trimmed mean inflation is higher than expected in Q4 ’25, expect the RBA to take a further leap in February to pivot to rate hike discussions.”
Citi: The investment bank believes the household spending indicator would silence any lingering dovish leanings the RBA may have had.
“With inflation sticky, the labour market still tight, house prices rising and household consumption growth accelerating, we now see material upside risk to our unchanged cash rate forecast of 3.6% for 2026. We will reassess our RBA view over the coming weeks.”
--Contact: Sophia@centralbankintel.com