RBA Holds Interest Rates Steady at 3.6% Despite Rising Inflation Concerns

The Reserve Bank of Australia (RBA) has decided to keep the cash rate steady at 3.6% following a stronger-than-expected rise in inflation during the September quarter. Despite previous rate cuts earlier in the year, inflation remains above the RBA's 2-3% target band, driven by increases in costs such as housing, insurance, healthcare, and education, which has led the RBA to adopt a cautious stance on further rate reductions. Market expectations now anticipate a prolonged pause in rate cuts, with some economists warning of potential rate increases in the coming years due to persistent inflation pressures and strong household spending. The RBA has also expressed concern about the inflation impact of government policies encouraging high leverage among home buyers, prompting regulatory bodies to tighten lending criteria. The decision to hold rates has kept the Australian property market active, with strong buyer competition and ongoing price growth, although mortgage holders continue to await relief. Overall, the RBA is balancing inflation control with economic stability, signaling that the era of cheap money is unlikely to return soon.