Highlights

  • The September statement said the Board remains prepared to raise rates further "if required", making the statement conditional on data.
  • The phrase is explicitly directional but does not constitute forward guidance as the RBA defines it.
  • Research Discussion Paper 2026-06 found forecasters updated inflation views after actual decisions, not after communication alone.
  • Inference that cuts are off the table reflects market interpretation of the data, not an explicit RBA statement.

A single phrase in the RBA's September 2026 decision statement has drawn close analysis: the Board said it remained prepared to respond "including increasing the cash rate target further if required." The phrase is directional and conditional. It is not forward guidance, and it does not take rate cuts off the table in any formal sense.

What "If Required" Means

The September decision statement recorded that "The Board will increase interest rates again if that's what's needed to get inflation down." The minutes captured this as the Board remaining prepared to respond, "including increasing the cash rate target further if required." These are statements of conditional intent: the Board is saying what it will do if circumstances warrant, not committing to a specific path.

Bullock was explicit about forward guidance at the September media conference: "I'm not going to give you forward guidance." The conditional phrasing in the statement is consistent with that stance. It tells markets what instrument the Board is prepared to use while keeping the decision contingent on the data that arrives before each meeting.

Why Communication Alone May Not Move Expectations

Research Discussion Paper 2026-06, "Perceived Monetary Policy Rules: Evidence From Professional Forecasters in Australia," by Jonathan Hambur and Qazi Haque, was released by the RBA on 22 October 2026. The paper found that during the uncertain post-COVID period, forecasters revised their view of how responsive the RBA was to inflation only after seeing actual policy decisions. Communication alone was not sufficient to shift expectations.

This finding is relevant to interpreting the "if required" language. If forecasters historically required actual decisions to update their views, then a conditional statement, however clearly worded, may have limited independent influence on rate expectations compared with the decisions themselves.

Rate Cuts: Market Inference, Not RBA Statement

The view that rate cuts are off the table is a market inference drawn from the Board's overall communication and the level of inflation, not an explicit statement by the RBA. The Board has not said cuts are excluded; it has said it will raise further if required. The distinction matters: the first is a characterisation, the second is the actual language used.

The paper in question presents the research of its authors and does not necessarily represent the views of the Reserve Bank.