No more rate reductions: Major Lender says that RBA has bound hands – realestate.com.au

Australians will have to wait more than eight months for more cash interest rates from the reserve bank, has warned a Big Four Bank.

This is the last prediction of National Australia Bank (NAB) after the Australian Bureau of Statistics had shown last week that inflation is increasing again.

NAB-de on two largest home lender in the Land-say that it now expects the reserve bench to keep at 3.6% until May next year next year.

This marks a big change in thinking for NAB, who had priced in a new cut earlier in November.

In a monetary policy update this week, the bank said that the inflation of the market services “is considerably hotter than we expected” and is no longer tailored to Reserve Bank of Australia (RBA) predictions.

The consumer price index came to 3.0% for last month, exactly at the top of the target range of 2-3% of the bank. The data also confirmed that Australia now experiences the highest annual inflation in 13 months.

“For the RBA, this means considerably less certainty that inflation has settled nearly 2.5% and emphasizes that it will take a period of modest restrictive inflation policy to settle,” Nab said.

“We no longer see that the RBA delivers 25 basic points cuts in November and February 2026. Our new profile for the cash rate sees the policy on hold for 3.6% for a longer period.”

The reserve bank started its long-awaited cutting cycle in February and has since followed a consistently cut-held pattern in 2025, while inflation risks have been moderated.

Throughout the year, RBA Governor Michele Bullock has warned against dependence on the monthly CPI figure, and said that instead the bank has strongly familiarized the quarterly inflation data to make decisions about cash -a display of NAB disputes.

“We think the signal is too strong to ignore,” the bank said. “This dynamic will be reflected in the quarterly inflation print.”

RBA Gouverneur Michele Bullock has said earlier that the board does not base decisions on monthly CPI figures. Photo: News Corp Australia

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NAB suggests that the RBA now has to reconsider the implications of a stronger growth momentum and the probability that core inflation will annually at the top of its 2.3% target range, if not outside.

“A period of modest restrictive policy will be both necessary and sufficient to ultimately force the trajectory of core inflation on a path that is consistent with the mandate of the RBA,” NAB warned.

The Monetary Policy Committee will meet at the beginning of next week and make the following decision on the cash rate on 30 September.

The Australian Stock Exchange RBA rate indicator shows that markets have priced in only a 4% chance of a reduction from 24 September.

This article first appeared on Mortgage choice And has been re -published with permission.