RBA Blog: June meeting preview: Rates on hold; more "space" than May...

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RBA Blog: June meeting preview: Rates on hold; more "space" than May...

Deutsche Bank

Research

Economics Date

RBA Blog 11 June 2026

June meeting preview: Rates on hold; more

Phil Odonaghoe "space" than May...

Economist

+61-2-8258-1606

We expect the RBA to keep the cash rate on hold at 4.35% at its meeting on

Tuesday. Forward guidance will likely be equivocal, at best, but there is a case

for Bullock to repeat that policy remains “well placed”, and that the Bank still

has “space” to assess developments. If anything, both statements have more

merit now than they did in May.

The RBA’s June Board meeting is due Tuesday and we expect the cash rate to

remain on hold at 4.35%. After 75bps of policy tightening delivered across the

RBA’s three prior meetings, the cash rate is now at a level that is actively leaning

against activity. The key variable in the near term remains the situation in the

middle east. Helpfully for this meeting’s deliberations, oil prices have dropped by

about 14% since the previous meeting on 5 May, but with little meaningful

progress towards a permanent resolution, expect the Board to discount much of

that.

Domestically, data since the May meeting has been mostly softer than the RBA

expected. The unemployment rate jumped to 4.5% in April, 0.3ppts above the

RBA’s forecast of a 4.2% average unemployment rate for Q2. Trimmed mean

inflation for April leaned softer (0.31%mom) than the monthly ‘run rate’ print

required to meet the RBA’s Q2 trimmed mean forecast (average of 0.35%mom

for a 0.95%qoq trimmed mean print). There were likely few surprises in the Q1

GDP report, though the RBA may have welcomed the slowdown in government

consumption spending in the quarter (-0.2%qoq compared to an average

quarterly pace of +0.9%qoq over the prior 12 quarters).