As the Reserve Bank of Australia deliberates its monetary policy for September, the nation’s leading financial institutions – the Commonwealth Bank of Australia, Westpac, National Australia Bank, and ANZ – have delivered a unanimous verdict: no rate cut is on the horizon this month.
Their collective analysis of economic indicators strongly suggests that any potential movement in the cash rate will be deferred until November, taking the cash rate from its current 3.60 per cent to 3.35 per cent by the end of the year, with Westpac noting it expects a further 50 basis points of easing in 2026.
However, this suggests that the RBA is likely to hold its cash rate steady at its September 29–30 meeting, following a 0.25 per cent rate cut in August.
It comes as Australian Bureau of Statistics data found employment fell by 5,400 in August, following a solid 26,500 gain in July.
MORE NEWS
Shocking reason Aussies are denied home loans
Revealed: Australia’s suburbs where homeowners never leave
‘Surprised’: RBA’s next move to shock Aussies
Full-time employment dropped by 40,900 during the month, while part-time employment grew by 35,500.
The Big Four’s consensus, driven by persistent inflation and a resilient labour market, means sellers are largely holding off listing properties, hoping for a more favourable borrowing environment.
The resulting low stock levels are creating fierce competition for available homes, pushing prices upwards in many areas despite elevated interest rates.
Commonwealth Bank of Australia
The Commonwealth Bank’s economic team has consistently highlighted the RBA’s data-dependent approach, noting that recent inflation figures, while moderating, have not yet reached a level that would warrant an immediate rate cut.
Their analysis points to the underlying strength in consumer spending and a robust employment market as key factors supporting the RBA’s current stance.
With that in mind, CBA economists believe a September cut unlikely but tip one more cut in November to bring cash rate to 3.35 per cent.
“This is an RBA Board that appears comfortable with the current inflation outlook and the pace of easing,” CBA Senior Economist Belinda Allen said following the August RBA rates decision.
“We expect another rate cut in November to take the cash rate to 3.35 per cent as the RBA continues its gradual and cautious easing cycle.”
Westpac
Westpac’s economic forecasts align closely with the broader consensus, firmly predicting no change to the cash rate in September.
Their analysis places a strong emphasis on the RBA’s desire to avoid any premature easing that could reignite inflationary pressures.
Westpac Group chief economist Luci Ellis has pointed to the stickiness of services inflation as a particular concern for the central bank, suggesting that this component needs to show more definitive signs of cooling.
She’s effectively ruled out a September cut, but November remains a possibility.
“The team has not changed its view that the RBA will cut twice more this year, with another reduction anticipated in November as well as the one in August,” she said in June this year. “Both cuts are expected to be 0.25 percentage points.”
Ellis further predicts an additional two cuts in 2026.
“These two cuts, also both 0.25 percentage points, are expected to occur in February and May 2026,” she said.
That would mean the RBA cash rate will bottom out at 2.85 per cent, from a peak of 4.35 per cent, according to Ellis.
National Australia Bank
NAB’s economic team also firmly expects the RBA to maintain the cash rate in September, citing the need for continued vigilance against inflation.
Their analysis often focuses on business sentiment and investment, noting that while some sectors are feeling the pinch of higher rates, the broader economy has demonstrated resilience. NAB economists believe the RBA will be particularly attentive to wage growth figures and their potential impact on future inflation.
The bank’s perspective is that the RBA will use the September meeting to reinforce its commitment to its inflation target, signalling that it is prepared to keep rates at current levels for as long as necessary.
In its latest market update, published last week, the bank predicted further rate cuts in November and February, bringing down the cash rate to 3.1 per cent by early 2026.
“The next meeting of the Monetary Policy Board is not until late September. We expect the cash rate to remain unchanged at 3.6 per cent at this meeting,” the report by NAB’s senior economists reads.
“The flow of data so far does not suggest any urgency to lower rates.
“Our expectation of a relatively cautiously calibrated easing cycle looks to be appropriate. The RBA cites various sources of uncertainty in the outlook, including around both the demand and supply sides of the economy, the trajectory of household consumption and conditions in the labour market.
“In this context, and against the backdrop of a better tone to activity data of late, we believe the RBA will want to see quarterly inflation data before considering the case for further easing.”
ANZ
ANZ’s economic outlook mirrors that of its peers, with a strong conviction that the RBA will keep the cash rate unchanged in September.
ANZ economists have consistently highlighted the importance of global economic factors and geopolitical risks in the RBA’s decision-making process, noting that these external pressures can influence domestic inflation.
The bank’s view is that the RBA will continue to assess the impact of past rate hikes, allowing time for these adjustments to fully permeate the economy.
In its August economic update, ANZ economists Adam Boyton and Adelaide Timbrell remained of the view that a follow-up cut in November was more likely than not, with
the cash rate to then stay at 3.35 per cent for an extended period.
“We note that the RBA’s forecasts are predicated on a cash rate assumption of 3.4 per cent by the end of 2025, 2.9 per cent at the end of 2026 and 3.1 per cent at the end of 2027,” they said.
[SRC] https://www.realestate.com.au/news/big-four-banks-reveal-when-rba-will-cut-rates-again/
