National Australia Bank has pushed back its rate-cut expectations, now seeing the Reserve Bank of Australia holding the cash rate at 3.6% until May next year:
- The bank had previously forecast cuts in November 2025 and February 2026
The shift follows this week’s CPI report, which points to a 0.9–1.0% quarterly rise in the trimmed mean for Q3 — about 0.3 percentage points above the RBA’s own forecasts. NAB said market services inflation was “significantly hotter” than expected, underscoring the risk that price pressures remain sticky.
According to NAB, the data leave the RBA with far less confidence that inflation has settled near its 2.5% target. Instead, it sees the central bank maintaining modestly restrictive settings for longer to ensure inflation comes back to target.
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At the margin, the hotter CPI read and NAB’s pushback on rate cuts add mild support to the Australian dollar, though the impact is likely contained given global drivers remain dominant.
