The RBA could now be set to hike to 4.60% this month, bringing the prospect of higher borrowing costs forward from November.
Goldman Sachs expects Australia’s next interest-rate increase this month, after hawkish comments from two senior Reserve Bank officials strengthened its case for earlier action.
The bank now assigns a 60% subjective probability to a September hike, up from 45% before the remarks.
“We now expect the RBA to hike in September, pulling forward our forecast from November.”
A quarter-point increase would take the cash rate to 4.60% at the 28–29 September meeting.
Goldman’s previous November forecast followed July’s inflation surprise, but the bank now believes waiting carries greater risks.
Deputy Governor Andrew Hauser and Assistant Governor Sarah Hunter both emphasised the threat from inflation, while Goldman’s higher oil-price forecasts added to the argument for tightening.
In his public interview, Hauser identified Middle East disruption, the AI investment boom and weak productivity as risks that could keep inflation elevated.
He also acknowledged falling house prices and weak consumer confidence, while making clear that a September increase was not inevitable.
Earlier tightening would reach beyond the Australian Dollar
At the time of writing, AUD/USD was down 0.12% at 0.7213, despite the prospect of higher Australian rates.
We think bringing the hike forward strengthens the currency’s interest-rate support, although further gains would depend partly on how much tightening investors have already priced in and the direction of US rates.
For borrowers, an earlier move could bring higher variable mortgage repayments sooner if lenders pass it through.
Australian bonds would also face pressure if investors raised their expected path for the cash rate, since higher yields reduce existing bond prices.
Goldman sees another increase later this year as a risk, but its central forecast still allows for an eventual reversal.
“We expect the Board to adopt a pre-emptive tightening to avoid falling behind the curve, with a follow-up hike in November a material risk – but our base case is that the RBA holds the policy rate at 4.60% until a gradual easing cycle begins in 2H2027.”
Our currency coverage draws on live market data, official economic releases and published bank research.
