1h agoTue 9 Dec 2025 at 3:31amReserve Bank keeps cash rate on hold
The RBA board has left the cash rate on hold at 3.6% in December.
1m agoTue 9 Dec 2025 at 5:13am
Cash rate to remain on hold for a while: ANZ
ANZ’s Head of Australian Economics, Adam Boyton, says the RBA’s tone is a ‘little less hawkish’ than markets might have been expecting.
He says it appears clear the Board is keeping its options open.
“Our views on the outlook for interest rates are unchanged given the nature of today’s post-meeting statement,” he said.
“We expect the cash rate to remain at 3.6% for an extended period. That said, in the wake of the Q3 national accounts and the October monthly CPI the risks of a rate hike in the first half of 2026 are rising.”
“Encouragingly, though, business survey-based measure of price of cost pressure are not moving higher, which gives us some confidence that inflation will ultimately trend lower over 2026.”
3m agoTue 9 Dec 2025 at 5:11am
Goodbye, governor
That’s a wrap on Michele Bullock’s press conference.
She finishes by wishing the press a happy Christmas.
There are no further engagements listed on the RBA website currently for the governor this year, but she’ll be back with her next regular press conference on February 3.
6m agoTue 9 Dec 2025 at 5:08amNo risk of imported US inflation ‘any time soon’, Bollock says
Our business editor Michael Janda lobbed a question to the governor — does she have any message for the members of the US interest rate setting committee, the Federal Open Market Committee (FOMC), which is meeting this week?
The Fed is expected to cut rates on Thursday, Australian time, despite inflation being above target, so is there a risk the US exports its inflation problem globally, he asks.
“I don’t have any message for the FOMC members. I wish them all the best in what’s a very difficult situation,” Ms Bullock answers.
“I think what they’re doing is they’re trying to look through what they see as some temporary tariff-related inflation issues…
“If you think there’s a price level shift then you don’t necessarily want to respond with tighter policy — they still think they are tight, they still think that they’re not back at neutral.
“So I can see the reasons why they would think that it might be appropriate to reduce the level of tightness a bit, knowing that inflation will come back down when the tariff effects move out…
“I don’t think there’s a risk that they’re going to be exporting inflation any time soon.
“But, again, these are some of the risks that all central banks, I think, are aware of…”
13m agoTue 9 Dec 2025 at 5:00am
Bullock doesn’t blame music fans for inflation
Things are getting a bit jovial, with Ms Bullock asked if she attended Oasis or Metallica or Lady Gaga on their recent Australian tours.
She says no, but she is going to a Boy and Bear gig.
She’s asked that if consumers spend up big in the silly season, will it “come back to bite them” at the next RBA meeting in February.
“People often put a lot of emphasis on big events… I think it’s also true, though, that people who are going to these big events often are sacrificing other things,” Ms Bullock says.
“If they’re going to spend that much money on an Oasis concert and accommodation and all that sort of thing, they might be forgoing, you know, some coffees or a breakfast out…
“So I think you can’t think about them in isolation and just say all these big events add to inflation. I don’t think it necessarily works that way.”
Loading
18m agoTue 9 Dec 2025 at 4:56am
📸 Michele Bullock delivering her December press conference
Business correspondent David Taylor snapped this pic, by the looks of it from the front row:
Michele Bullock (ABC News: David Taylor)
DT asked Ms Bullock what the most challenging conversation she had in 2025 was.
“You mean personally?” she laughs. “I’ve had a few of those personally!”
On a serious note, she says she’s had some challenging conversations with internal RBA staff.
“I don’t mean challenging in the sense that I felt in any sense affronted by it, but you know, I’ve been trying to encourage people to speak out and disagree with me if they want to.
“And sometimes that’s meant that people have come up with views and expressed views that were in very direct opposition to me…
“That’s part of my remit. But I’d say for me, 2025 has seen a bit of a change in the way that we have had internal conversations. And I think that challenge has been good.”
22m agoTue 9 Dec 2025 at 4:52amToo many rate cuts in hindsight?
A follow up from David Chau — if the RBA does end up hiking, is that an admission that it cut rates too many times in 2025?
Ms Bullock says “you could read it that way” but notes a lot has changed.
“You go back six or seven months and a lot of people were saying we needed to drop interest rates quite a lot because things were very, very soft.
“The board has been cautious, I think that has been borne out.”
29m agoTue 9 Dec 2025 at 4:44amNo rate cuts on horizon for foreseeable future: Bullock
Our business reporter David Chau cuts to the chase and asks whether a rate cut or rate hike next year is the more probable outcome, eliciting a laugh from the governor.
“I don’t think there are interest rate cuts on the horizon for the foreseeable future. The question is, is it just an extended hold from here or is it the possibility of a rate rise?
“I couldn’t put a probability on those, but I think they’re the two things that the board will be looking closely at coming into the new year.”
You couldn’t really get much clearer.
32m agoTue 9 Dec 2025 at 4:42amASX, Aussie dollar reaction to a hawkish bullock
The Aussie dollar has risen since the start of Ms Bullcok’s press conference, up 0.2% to 66.39 US cents.
Meanwhile, the ASX 200 has extended losses, now down 0.4%
That indicates traders are viewing Ms Bullock’s comments as hawkish, unsurprisingly given she’s talking very much about an extended hold or rate rises, taking rate cuts off the horizon.
35m agoTue 9 Dec 2025 at 4:39amBullock won’t put timing on hike, says ‘meeting by meeting decision’
Asked about how much more inflation data the RBA would need to see before considering a rate hike, Ms Bullock declines to put timing on it.
She notes that if inflation looks to be persistent rather than due to one off items, it raises questions including “how restrictive are financial conditions”.
“We’ve been judging that financial conditions were still a little bit tight.
“If inflation continues to be persistent and looks like it is not coming back down towards the target, then I think that does raise questions about how tight financial conditions are and the board might have to consider whether or not it’s appropriate to keep interest rates where they are or in fact at some point raise them.
“But I wouldn’t put a timing on that. It’s going to be a meeting by meeting decision.”
39m agoTue 9 Dec 2025 at 4:35amWe didn’t consider the case for a rate cut at all RBA: Bullock
Ok here we go — straight into the hard questions and Michele Bullock isn’t backing away at all.
“We didn’t consider the case for a rate cut at all.
“We didn’t explicitly consider the case for a rate rise at this meeting, but we did consider and discuss quite a lot the circumstances and what might need to happen if it we would decide that interest rates had to rise again at some point next year.”
So certaintly “no cut” on the table today, Ms Bullock says.
42m agoTue 9 Dec 2025 at 4:31amMichele Bullock speaking in Sydney
The RBA governor has stepped up and is delivering her opening remarks.
She said the board is “alert” to the signs of a more broad-based pick up inflation but is cautious on how much signal to take from the new monthly Consumer Price Index figures, which were hotter-than-expected.
46m agoTue 9 Dec 2025 at 4:27am
Michele Bullock to face questions on rates outlook
Michele Bullock has avoided Christmas-related tabloid headlines, by failing to deliver either a Christmas present for mortgage borrowers in the form of a rate cut or to play the Grinch by hiking in December.
So it’s likely many of the questions she’ll face will be about the outlook for 2026.
Here’s a view from the room from business editor Michael Janda.
RBA press conference set up (ABC News: Michael Janda)
49m agoTue 9 Dec 2025 at 4:24am
RBA Governor Michele Bullock to speak shortly
We’ll be live blogging the RBA governor’s press conference at 3:30pm AEDT and you can also watch it on ABC News Channel:
54m agoTue 9 Dec 2025 at 4:20amWhat does the RBA decision mean for housing trends?
Growth in house prices could flatten, says Cotality’s research director Tim Lawless, writing on what could happen to the property market if rates remain on hold.
“An extended period of stable interest rates against a backdrop of rising home values is likely to temper home purchasing demand,” he explained.
“Households on the median income have already seen their lift to borrowing capacity eroded by higher home values.
“Any hawkish shift in the RBA’s tone toward the outlook for interest rates would weigh on confidence and dampen transaction activity.”
Mr Lawless says the most activity will probably remain in the lower end of the market.
“With rates on hold for the foreseeable future, lower quartile home values are likely to remain the stronger segment of the market, as mainstream demand is deflected towards the lower price points amid affordability and serviceability constraints.
“Competition among first home buyers and investors is already seeing values rise faster across the lower price points of the market.
“Conversely, growth in house values across the upper quartile markets of Sydney and Melbourne has already shown signs of flattening as demand funnels towards more affordable housing options.”
56m agoTue 9 Dec 2025 at 4:18amInterest rates on hold an ‘expected result’: Treasurer
Treasurer Jim Chalmers spoke a short time ago, saying the ‘on hold’ decision was an expected result.
“A lot of Australians would have wanted some more rate relief but they wouldn’t have expected it,” Chalmers said.
He noted the RBA’s mention of private demand, saying the “heavy lifting” in the economy is now being done by the private sector.
“We want to see this inflation moderate more, but it is only a bit over half what we inherited when we came to office, so Australians have made a lot of progress together on inflation, on real wages, on this recovery in the private sector,” the treasurer said.
“We know there is more work to do and there are elements of the Reserve Bank statement that make this clear.”
1h agoTue 9 Dec 2025 at 4:12am
Market still pricing in rate hike by August
Market pricing for interest rate hikes is not much changed from pre-RBA decision, a quick check of Bloomberg reveals.
An 0.25 percentage point rate hike is fully priced in by August 2026
1h agoTue 9 Dec 2025 at 4:07amEconomists divided on direction of next RBA move
The analyst notes hitting our inboxes have wildly different views on what the Reserve Bank will do next.
Callam Pickering, APAC economist at Indeed says if inflation persists, they may have to hike rates at the next board meeting in February.
“If high inflation persists through December and January, then the RBA may have no choice but to hike rates when they meet in February. A failure to do so would ultimately undermine their credibility as an inflation targeting central bank.”
“High inflation is incredibly damaging to an economy, impacting every business and household, but the burden falls primarily on lower income households and small businesses. Higher interest rates won’t be welcomed – they never are – but at least the burden of higher rates primarily falls on middle and higher income earners.”
PIMCO Head of Australia Portfolio Management, Adam Bowe, says it’s ‘premature’ to conclude the easing cycle is over.
“Pauses are common features of RBA monetary policy cycles, both on the way up and the way down. As households and businesses remove expectations of lower interest rates from their spending plans for 2026 we expect the growth and inflation data to moderate.”
Meanwhile, the Australia Institute’s chief economist Greg Jericho says cuts are just as likely as hikes in 2026.
“The inflation increase in October, from 3.6% to 3.8%, was largely a one-off response to the ending of power bill subsidies. That isn’t a trend,” he said.
“The truth is, market predictions of rate hikes and cuts will swing with new data on inflation, economic growth, real wages and unemployment.”
1h agoTue 9 Dec 2025 at 3:59amASX, Aussie dollar barely budge on RBA hold
There’s been a pretty muted reaction on markets to the RBA’s (widely anticipated) decision to keep the cash rate on hold.
At 2.30pm AEDT the ASX 200 had a very, very brief spike but is now pretty much where it was before the decision, around 0.2% weaker at 8,606 points.
ASX 200 on Tuesday (LSEG Refinitiv)
The Aussie dollar is steady around 66.25 US cents.
1h agoTue 9 Dec 2025 at 3:55am
RBA could still cut rates in 2026, says economist
Going against the forecasts of most economists and the markets, KPMG says there is still an opportunity for the RBA to cut rates in 2026.
“Although the likelihood of a further rate cut has diminished, KPMG still believes that there may be an opportunity for the RBA to cut rates further in the first half of 2026,” said KPMG chief economist Dr Brendan Rynne.
He says it will depend on how fiscal policy plays out over the coming months and whether the transition of demand from the public sector to the private sector continues.
KPMG analysis (which removes electricity rebates from the CPI calculations) suggests headline inflation is about 3.2% (instead of 3.8%) and that the growth in inflation has been slowing in each 3 month period of the past year. This suggests that as the high monthly volatility drops out as the year progresses, inflation will fall closer to the RBA target band.
“While the pace of economic growth is not stellar, there is evidence that in the current low-productivity environment it is still exerting upward pressure on prices.
This, together with continued price growth in the non-market sector of the economy, is likely to keep inflation at the upper end of the target band in the near term, reducing the likelihood of reaching the mid-point of 2.5% being targeted by the RBA and providing an opportunity for another rate cut.”
Mr Rynne says today’s decision to keep rates on hold was the right call.
“While it might not be the news mortgage holders were looking for, the RBA was right in holding off on any change to the cash rate, be that up or down,” said KPMG chief economist Dr Brendan Rynne.
“We believe the RBA should continue to wait for the next few months to better understand whether the recent rises in inflation are the start of an upward trend or a temporary blip that will dissipate.”