One more and done for the RBA

With some of the upside inflation risks it had warned about now crystallising, the RBA is almost certain to hike rates by 25bp at its September meeting. However, we believe that will mark the end of the tightening cycle, even though markets think the Bank has more work to do. As restrictive policy settings create slack in the economy and alleviate inflationary pressures, we expect the Bank to start cutting rates from Q3 2027.