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RBA hike seen as risk management, not new tightening cycle

TD Securities expects the cash rate to stay on hold at 4.60% through 2027, with no further hikes in 2026.

Reported · Written up by our desk · Central Banks

TD Securities Macro Research, in an FXStreet writeup, said the Reserve Bank of Australia’s September 25 basis point move to a 4.60% cash rate looked like a risk-management decision rather than the start of a new tightening cycle.

The note expects no further RBA hikes in 2026 and calls for policy to remain on hold through 2027.

TD Securities also said its reading differed from the market’s hawkish interpretation of the RBA statement, arguing it did not explicitly signal a rapid follow-up hike.

The team stated that if the RBA does not hike in November, the prospect of having to hike in December would be difficult, while still keeping its central base case as holding the cash rate at 4.60%.

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