RBA Review: No Fireworks

The RBA kept rates unchanged at the August meeting. It is widely expected, given RBA's stance in assessing the lagged effect from previous consecutive hikes. They believe the inflationary impact from Middle East is less than their forecast. With headline and trimmed mean inflation above target range, the RBA says they are willing to hike to keep inflation in check. But in reality, unless there is an upside surprise, they will not be hiking. 

The key change to forecast seems to be the RBA now expecting inflation to go back below target range by late 2027, instead of mid 2027. Else, it is a relatively short statement without major changes to our rate and inflation forecast.