RBA May Put Rate Hikes Back on Table in 2026, CBA’s Yeaman Says

Australia’s central bank may shift to raising interest rates next year if price pressures remain stubbornly strong and the labor market tightens further, said Luke Yeaman, chief economist at Commonwealth Bank of Australia.

“We will continue to run close to the economy’s speed limit, so the Reserve Bank board will constantly be on edge and rate cuts will remain off the agenda,” Yeaman, who previously worked as deputy secretary at Treasury, said in a research note on Tuesday. “If the economy builds more steam than we expect, watch for rate hikes in 2026.”