Experts divided on outcome of RBA’s next rate decision

Yasmine Raso

Senior Journalist, Financial Newswire

16 March 2026

Economists and market commentators are divided on the outcome of the Reserve Bank of Australia’s (RBA’s) next monetary policy decision to be announced tomorrow, with many still not convinced of a hike despite such heightened global uncertainty that has already impacted markets.

According to Finder’s RBA Cash Rate Survey, only 38 per cent of the 37 finance experts and economists surveyed said they were predicting a cash rate hike – with the remainder expecting a hold.

This is in stark comparison to the view held by the big four banks and HSBC who are leaning mostly into the hike camp, citing “fairly hawkish” commentary given by RBA Deputy Governor, Andrew Hauser, last week that implied the central bank’s concerns lie with overly-high domestic inflation which has only been exacerbated by the tensions in the Middle East.

“We’re seeing a real tug-of-war in the forecasts. While all four of the big banks are predicting a hike, some experts in our survey aren’t convinced the RBA will move just yet,” Graham Cooke, Head of Consumer Research at Finder, said.

“Between the volatility in the Middle East pushing up fuel prices and the RBA’s need to rein in inflation, it’s a high-stakes guessing game for everyone.

“There’s no meeting in April so the board may be moved to act now. A rate hike would put immense pressure on household budgets that are already stretched thin.”

AMP’s Chief Economist and Finder survey respondent, Shane Oliver, confirmed he was one of the experts expecting a hike.

“We expect that the RBA will raise rates again at its March meeting reflecting concerns about a further boost to inflation and inflation expectations as a result of higher energy prices flowing from the US/Israel war with Iran at a time when inflation is already above target,” Oliver said.

On the flip side, Adjunct Professor and Executive-in-Residence with the Queensland University of Technology, Noel Whittaker, was one of few to tip a hold.

“This is being written at a time of war, with clear indications that the disruption will affect commodity prices, including oil. This is bound to have an inflationary effect on Australia, as it will in most other countries,” he said.

“But in my view, this is no time for the Reserve Bank to be raising interest rates. There’s no point making Australian householders pay more on their mortgage to combat inflation that is not of this country’s making.

“The prudent course would be to hold rates steady and wait until at least the next meeting to see how events unfold.”

Pleading the case for a hike, Paul Bloxham, HSBC’s Chief Economist, Australia, NZ & Global Commodities, agreed that the RBA is in a tight spot given the tensions in the Middle East have developed at a time where the central bank cannot effectively assess how much the hike in February has impacted households.

“The domestic economy is operating beyond its capacity and inflation is still too high,” he said.

“The rise in oil prices related to the Middle East conflict will increase headline inflation, but will also weaken growth – as it is a negative supply shock. Core inflation should not rise much and the central bank could look through it. But with core inflation already well above target – at 3.4% y-o-y in 4Q25 – there is little wriggle room.

“At the same time, the events in the Middle East are still highly uncertain. The longer the conflict continues and oil and gas supply are blocked, the more likely it delivers higher energy costs and the more sharply it could weaken global and local growth.”

Despite this, Bloxham noted that a hike in March was “not a ‘slam dunk'”.

“The market has taken this interview as guidance that a hike is more likely in March than not. Despite the still very high uncertainty, but also in the absence of any other guidance about the RBA’s reaction function, we now factor in a hike in March as a bit more likely than a hold (pulling forward our earlier view for a hike in 3Q).

“The RBA could still choose to hold in March and to cite high uncertainty, particularly if the next few days brings further significant market-relevant turbulence in the Middle East. We also add another hike into our view for 2Q26, given the RBA’s hawkish tilt, much higher oil prices, and lack of wriggle room in an economy operating beyond its capacity.

“We lift our near-term CPI forecasts and lower our growth forecasts (we forecast growth of 1.5% in 2027, previously 2.0%).”