RBA Warns Inflation Isn’t Fixed — More Rate Hikes Possible
With all four major banks forecasting another rise, mortgage holders face a critical window before the 28–29 September board meeting.
If you're sitting on a variable-rate mortgage or thinking about locking in a fixed rate, the next few weeks could be among the most consequential for Australian borrowers in some time. Australia's Reserve Bank is signalling it may not be done raising rates — and now every major bank agrees another increase is coming.
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser put it bluntly in an interview on ABC's 7.30: "We have one big problem and that's inflation. Inflation is too high, and that's why we raised interest rates three times at the beginning of this year. And the question now, frankly, for us, is have we done enough or is more needed?" As The Adviser reports, those remarks have sharpened expectations of further tightening, with the RBA's 28–29 September board meeting now firmly in focus.
The official cash rate sits at 4.35%, after 75 basis points of increases earlier in 2026. That tightening followed a brief easing cycle in the second half of 2025 — a period the RBA treated as a test of whether it had done enough. Recent data suggests the answer is no.
Inflation Still Running Above Target
The RBA's preferred measure of underlying price pressure — trimmed mean inflation — came in at 3.6% in July, unchanged from June and well above the top of the central bank's 2–3% target band. Headline CPI for the 12 months to July was 3.5%, down slightly from 3.8% the previous month, but still elevated enough that the RBA cannot declare victory.
Hauser acknowledged the data directly. "We've had an inflation number actually a couple of weeks ago, and it was a little stronger than we'd expected and the market expected," he said. "And the GDP growth numbers that came out last week were also a bit stronger. So both of those are going to be in the mix."
He identified three areas of concern: the ongoing conflict in the Middle East, the rapid global investment cycle around artificial intelligence, and Australia's limited ability to expand its productive capacity quickly enough to meet demand without pushing prices higher. After a recent trip to the United States, Hauser said he had returned "a bit more worried" about upside inflation risks.
"People are furious about inflation. I understand why. Everywhere I go, I hear cost, cost, cost, inflation, inflation, inflation, and that's our responsibility. We have to put that right," he said.
Where the Major Banks Are Landing
The clearest signal of what is coming is the rapid convergence of all four major banks behind a rate-rise forecast.
Westpac was the last of the Big Four to hold out, revising its forecast this week to expect a 25-basis-point increase to 4.60% at the November meeting. With that change, all four major banks — National Australia Bank (NAB), Commonwealth Bank of Australia (CBA), Australia and New Zealand Banking Group (ANZ), and Westpac — now anticipate at least one further rise before the year is out. NAB is forecasting action at the 28–29 September meeting, while CBA and ANZ have identified November as the more likely timing if September passes unchanged.
Macquarie Bank has gone further. Chief economist Ric Deverell announced Macquarie was forecasting a 25-bp hike to 4.60% at the September meeting, describing Hauser's comments as "a clear steer on which side of the fence RBA staff have landed." Deverell contextualised the situation: the RBA had deliberately hiked less than comparable economies in 2022–23 to preserve employment gains, eased by 75 basis points in the first half of 2025 when inflation appeared to be returning to target, and then reversed course with 75 basis points of tightening in early 2026 when both growth and inflation rebounded. With unemployment still around three-quarters of a percentage point below its pre-COVID level, Deverell said the RBA appeared to believe the economy is still running above potential — and that more work is needed.
Financial markets have moved in the same direction. By the first week of September, futures were pricing in a 54% probability of a September hike. If the meeting passes without a move, implied pricing suggests close to a 97% chance of a November increase.
What Borrowers Should Do Right Now
A 25-basis-point increase adds roughly $95 per month to repayments on a $600,000 variable loan with 25 years remaining. If both a September and a November hike land, that is closer to $190 per month above today's level — a meaningful hit to household cash flow, particularly for borrowers already stretched by higher living costs.
The most important step for variable-rate holders right now is to check whether you are actually on a competitive rate. The gap between the sharpest variable rates and the standard variable rates at major banks can exceed a full percentage point, worth thousands per year regardless of what the RBA does next. Browse our cheapest home loan rates to benchmark where you stand.
For borrowers weighing a refinance, acting before a rate announcement means reviewing options calmly rather than scrambling after the fact. Lenders take time to assess applications, so starting now is the practical move. Use our refinance savings calculator to estimate what switching to a lower rate could save over the remaining life of your loan, and our borrowing power calculator to understand how further moves could affect what you can borrow.
The RBA board meets on 28 and 29 September. Whatever the outcome, the case for reviewing your mortgage before that date — rather than reacting after — is clear.