The Commonwealth Bank of Australia (CBA) said Sunday that it expects the Reserve Bank of Australia (RBA) to leave the cash rate unchanged at 4.35% at its August meeting and to remain on hold for the remainder of 2026, arguing that economic data since the RBA's May forecasts leaves little urgency for further tightening.

The decision is due Tuesday, 11 August 2026 at 2:30pm Sydney time (04:30 GMT, 12:30am US Eastern), with Governor Michele Bullock's press conference following an hour later at 3:30pm Sydney time (05:30 GMT, 1:30am US Eastern). The August meeting falls within the RBA's quarterly forecast-round cycle, meaning the Board will release its updated Statement on Monetary Policy (SMP) alongside the rate decision, providing a fresh set of projections for growth, inflation, and employment.

According to CBA's economists, growth has slowed broadly in line with the RBA's May projections, while inflation has tracked below expectations, the labour market has eased a little faster than anticipated, and the housing market has deteriorated more than the central bank had forecast. Taken together, CBA said those trends give the Board room to hold rather than move again so soon.

Despite the case for holding, CBA expects the RBA to keep its language firm, reiterating that inflation remains elevated and that it stands ready to raise the cash rate again if conditions warrant it. The bank anticipates the RBA will use the meeting to assess the lagged effects of its earlier rate hikes rather than add to them.

CBA also expects the RBA to publish updated economic forecasts alongside the decision, with the bank anticipating an upward revision to the unemployment rate given the labour market's recent trajectory, and downward revisions to both headline and trimmed mean inflation — the RBA's preferred measure of underlying price pressure, which strips out volatile outliers — for the rest of the year. A genuine downgrade to the inflation track could be read as opening the door to easing later in the cycle, even if the Board maintains a hiking bias in its language.

The bank flagged a specific risk that could force the RBA's hand: a renewed escalation in the Middle East conflict, which it said could encourage businesses to pass through additional costs in the third quarter of 2026 and reignite inflationary pressure. Despite that risk, CBA said current data and its own forecasts for the remainder of 2026 do not support tightening now.

CBA's view builds on its reading of June's inflation data, which it said showed higher input costs were not broadly flowing through to consumer prices. CBA said at the time the result supported its call for the RBA to stay on hold through the rest of 2026, adding that the softer outcome offered some reassurance that price pressures were easing slightly faster than its own forecasts had anticipated.

For now, CBA's framing points to a central bank in wait-and-see mode, which typically keeps the Australian dollar rangebound around the meeting unless the updated forecasts or governor commentary surprise materially in either direction. The combination of no rate move but no dovish pivot suggests limited near-term direction for AUD from the decision itself, though attention will shift quickly to the next quarterly CPI release and monthly labour force data for further confirmation of the disinflation and labour-market-cooling trends CBA describes.

(Earlier: Heads up RBA preview: Analysts see cash rate on hold at 4.35% Tuesday)