The RBA's September meeting comes at a pivotal moment, with rising oil prices and bond yields increasing the chance of a fourth rate hike in 2026.
Business & Markets Desk is a contributing writer covering business and public affairs for The Sydney Times.
The Reserve Bank of Australia's Monetary Policy Board will meet on 28 and 29 September 2026, with markets pricing a high probability of a further 25-basis-point increase to the cash rate target, which currently sits at 4.35 percent.
The RBA has raised rates three times in 2026: 25 basis points in February to 3.85 percent, 25 basis points in March to 4.10 percent, and 25 basis points in May to 4.35 percent. The Board hoped these hikes would bend the arc of inflation back towards the 2 to 3 percent target band by the end of 2027. That trajectory is now in doubt.
Brent crude has risen above US$107 a barrel as conflict in the Middle East disrupts energy markets. Unleaded petrol is approaching $2.10 a litre and diesel has passed $2.50. Fuel prices feed directly into the CPI, particularly for transport and goods distribution. Higher oil prices also lift inflation expectations, which pushes up bond yields and the discount rate applied to all future cash flows, including mortgage rates and business borrowing costs.
The US Treasury's underwhelming bond buyback has pushed global long-term yields higher, with Australia's 3-year government bond yield climbing above 5 percent, its highest level in around 15 years. The RBA cannot ignore the pass-through from global bond markets to Australian lending rates, which are already pressuring household budgets and business investment.
According to the Guardian analysis of the RBA's inflation challenge, the global oil benchmark has risen above US$107 a barrel for the first time since July, adding to inflation pressures that the RBA had hoped would be easing by now. The Federal Reserve, the RBA and the ECB are all facing renewed pressure to tighten policy as inflation expectations re-anchor higher.
A 25-basis-point increase in September would take the cash rate to 4.60 percent. If Citi's expectation of a further hike in November proves correct, the cash rate would reach 4.85 percent by year-end. For a typical Australian household with a $600,000 mortgage, every 25-basis-point increase adds roughly $90 per month to the minimum repayment on a standard variable loan.
The RBA's post-decision statement will contain the Board's current assessment of inflation, growth and labour market conditions, and will include language indicating the Board's inclination on future policy moves. As a non-SMP meeting, there will be no updated set of economic forecasts published alongside the decision. The Governor will hold a press conference at 3:30 pm AEST following the announcement.
The decision comes as the Australian economy shows mixed signals. Employment remains resilient, but household consumption is under pressure from higher borrowing costs and elevated petrol prices. Business investment has been slow to respond to the RBA's tightening cycle, and the housing market shows signs of stress in higher price brackets. The Board must weigh the risk of overtightening against the risk of allowing inflation expectations to become unanchored.
The decision will be published at 2:30 pm AEST on Tuesday, 29 September 2026, following the two-day meeting on 28 and 29 September. The Governor holds a press conference at 3:30 pm AEST immediately after. The next meeting is scheduled for October 2026. For more on Australian business and finance, see Business & Markets.
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