RBA poised to lift cash rate to 4.6% as inflation pressures mount

The Reserve Bank of Australia is likely to set the cash rate at 4.6% on Tuesday, marking the highest benchmark borrowing cost since November 2011. Although the board usually waits for quarterly inflation data, officials have signaled a shift toward quicker action, citing stubborn core inflation and rising costs in fuel and oil. Comments from Governor Michele Bullock and senior staff indicate a reduced tolerance for a prolonged overshoot of the target midpoint.

Analysts expect the decision to be unanimous and warn that a one-percent rise in the trimmed-mean inflation for the September quarter could trigger another hike in November. Upcoming releases from the Australian Bureau of Statistics, including household spending and building approvals, will provide further guidance. Meanwhile, Australian equity futures were largely unchanged, while U.S. indices rose on AI-related gains.