With many Australians facing higher mortgage costs, speculation surrounding when the RBA will stop increasing the cash rate has economists abuzz. 

Since April 2022, the cash rate has been lifted by 175 basis points in an effort to bring inflation - currently 6.1% - back within the 2-3% target band. 

With RBA Governor Phillip Lowe alluding to a neutral policy setting of around 2.5%, the current cash rate of 1.85% still has some catching up to do. 

So what is the forecast for the months ahead? Economists from the big four banks have slightly different outlooks. 


Westpac chief economist Bill Evans said while it doesn’t seem likely the Board will ease back to a 25 basis point pace in September, they are most likely on the horizon.

“There does not appear to be any evidence to suggest such a policy and we confirm our view that there will be another lift of 50 basis points in September,” Mr Evans said.

“However, there were references that might imply a more cautious approach after September and we see them as consistent with our view.

“We expect that objective will require a series of four 25 basis point moves following the 50 basis points in September.”

This forecast will take the cash rate to 3.35% by February 2023.


CommBank economists expect the cash rate to rise further with an expected 50 basis points in September, followed by a pause in October, and a 25 basis point move in November.

This brings the cash rate to 2.60% by year-end which CommBank economists believe will bring inflation under control. 

“We expect the cash rate to be 2.6% by November,” Gareth Aird, CommBank head of Australian economics said.

“But the RBA could shift to ‘business as usual’ 25 basis point monthly increments from here if the upcoming data makes the case.

“On that basis we would expect three consecutive 25 basis point rate hikes [September, October, November] to still arrive at the same terminal rate of 2.60% in November.”

Additionally, CommBank forecasts predict interest rate cuts will be contemplated in 2023. 


According to ANZ economists, the RBA will deliver another 50 basis point lift at the next review.

ANZ head of Australian economics David Plank said strong momentum in the labour market and inflation risks would force the RBA to move to a “restrictive setting” by year-end.

“Our expectation is that the RBA will deliver this via four more successive 50 basis point rate hikes in August, September, October, and November,” Mr Plank said.

“This 200 basis points of additional tightening sees the cash rate target at 3.35% by November.”


Ivan Colhoun, NAB chief economist, believes the RBA will push the cash rate into restrictive territory in order to control and reduce inflation. 

“NAB’s view is that seeking a return to 2%, 3% inflation will likely require at least a slightly restrictive monetary policy setting, which we suggest is in the 2.6-2.85% cash rate range,” Mr Colhoun said.

“NAB remains comfortable with its 2.85% cash rate forecast for end 2022 but continued to see a step down in the size of rate increases after this next meeting and a likely pause before the year-end.”

Meanwhile, AMP chief economist Shane Oliver sees the cash rate peaking at 2.6% either at the end of the year or early next year. 

We remain of the view that the cash rate won’t have to go as high for the RBA to cool demand enough to take pressure off inflation and keep inflation expectations down as the futures market and some economists are expecting,” he said.

With some economists predicting the cash rate to rise over 3%, Mr Oliver believes this is too hawkish.

"We can see global supply pressures on inflation appear to be easing, the RBA is already getting traction in terms of slowing demand, inflation expectations are still contained, and many households will experience significant financial stress with rising rates,” he said.

Mr Oliver believes interest rates will likely fall in the second half of next year which “should help head off worst case scenarios for the property market and the economy.”


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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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