Analysis

The Reserve Bank of Australia is highly likely to increase the cash rate following its March 17, 2026 meeting. Current market odds strongly favor this outcome at 77.5%, indicating significant investor conviction. This aligns with the RBA's stated commitment to tackling inflation, which remains above its 2-3% target band (trimmed mean at 3.4%). The economy continues to run above trend capacity, with strengthening private demand and accelerating household spending contributing to price pressures. RBA Governor Michele Bullock's forward guidance, emphasizing that 'every meeting is live', signals a continued proactive approach to monetary policy. Furthermore, major Australian banks and a Reuters poll widely anticipate another 25 basis point hike at this meeting, supporting the high probability of an increase.