Reuters poll: RBA seen raising cash rate to 4.10% on March 17, then 4.35% by end-2026

A Reuters poll shows economists expect the RBA to raise rates to 4.10% in March and potentially to 4.35% later this year.Summary:23 of 30 economists expect the RBA to raise the cash rate to 4.10% on March 17.The forecast marks a shift from February’s poll, which expected rates to remain at 3.85%.The median forecast now sees rates reaching 4.35% by end-2026.Strong growth and rising inflation expectations are driving the shift.The Middle East energy shock is also cited as a risk to inflation.A strong majority of economists expect the Reserve Bank of Australia to raise interest rates again at its upcoming March policy meeting, reflecting growing concern about persistent inflation pressures and resilient economic growth.According to a Reuters poll conducted between March 10 and March 12, 23 of 30 economists expect the RBA to lift the cash rate by 25 basis points to 4.10% at its March 16-17 meeting. Seven economists forecast no change.The poll marks a notable shift in expectations compared with February. At that time, economists generally anticipated the policy rate would remain at 3.85% through the year. Since then, stronger economic data and renewed inflation risks have led analysts to revise their forecasts higher.Australia’s economy expanded 2.6% over the past year, the fastest pace in nearly three years, reinforcing concerns among policymakers that growth above roughly 2% could add to inflation pressures. The RBA has repeatedly warned that inflation remains above its 2–3% target band, and officials have emphasised the need to prevent inflation expectations from drifting higher.Deputy Governor Andrew Hauser has signalled the board will have a “genuine debate” over policy settings, remarks widely interpreted by markets as reinforcing the possibility of another rate increase.The Reuters poll indicates that economists now expect the tightening cycle to continue beyond March. The median forecast sees the cash rate reaching 4.35% by the end of 2026, a notable revision from the 3.85% median projection in February’s poll.Among economists providing forecasts beyond the March meeting, 17 of 27 expect rates to reach 4.35% by the third quarter, while others see the policy rate peaking at 4.10%.Major Australian banks have adopted similar views. ANZ, CBA, NAB and Westpac have all suggested the cash rate could reach around 4.35% as early as May, depending on how inflation and inflation expectations evolve.Economists note that the renewed rise in global energy prices linked to the Middle East conflict could complicate the inflation outlook. While policymakers may treat the direct impact on headline inflation as temporary, officials remain concerned that higher energy costs could influence inflation expectations, making it harder to return inflation sustainably to target.The RBA raised rates last month for the first time in roughly two years after previously delivering 75 basis points of cuts between February and August 2025. That easing cycle was the shallowest since the central bank began publicly announcing policy decisions in 1990.With growth still firm and inflation above target, economists increasingly believe policymakers may need to tighten further to ensure inflation pressures do not become entrenched.
This article was written by Eamonn Sheridan at investinglive.com.

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