Reserve Bank Australia Holds Key Rate at 3.6% Amid Inflation Concerns

Australia’s Reserve Bank left the cash rate unchanged at 3.6% in a unanimous decision, citing stronger-than-expected inflationary pressures, firmer consumer demand and a housing-market revival that make it cautious about further easing. The bank’s preferred trimmed-mean measure jumped sharply in Q3 and RBA staff now see underlying inflation around 3.2% into mid-2026, effectively pushing the prospect of another cut well beyond the near term. Markets and economists have materially trimmed expectations for additional easing—traders price the next cut only around mid-2026 and some banks say borrowers may have seen the last cut this cycle. Governor Michele Bullock will expand on the outlook at a post-meeting press conference, but the RBA signalled it will be guided by incoming data rather than forward guidance. Separately, Bank Negara Malaysia is also widely expected to keep its overnight policy rate at 2.75% amid forecasts GDP will meet the government’s 4–4.8% range, with any further moves to be driven by incoming data and external risks next year.