Australia’s central bank projects inflation will exceed its 2-3% target until at least 2027 following an 8-1 vote to raise rates.
The Reserve Bank of Australia expects inflation to stay above its 2% to 3% target range until at least 2027, according to minutes from its May 2026 meeting. The projection follows an 8-1 decision to raise interest rates, signaling prolonged monetary tightening.
Prior forecasts had suggested inflation would return to target sooner, but persistent price pressures have delayed expectations. The RBA’s stance contrasts with other central banks that have begun easing cycles or signaled near-term cuts.
Markets reacted by pricing in a higher terminal rate, with Australian bond yields rising and the AUD strengthening against major currencies.