When a senior Reserve Bank of Australia (RBA) official chooses to describe Inflation as the central bank's "top priority right now", investors listen. That was the message from Assistant Governor (Economic) Sarah Hunter at the Australian Financial Review Property Summit on 8 September 2026, just weeks before the Monetary Policy Board's 28 and 29 September meeting. Hunter's remarks framed the coming decision squarely around inflation risk, and drew a careful line between the pressures the RBA can influence and those it cannot. With the cash rate at 4.35 per cent, underlying inflation running near 3.5 per cent, and markets pricing roughly a two-in-three chance of a rise, her comments sharpened the sense that the Board's patience has limits.

What the RBA Said

Hunter's central line was direct: "inflation is top priority right now." She said the August Statement on Monetary Policy had judged the risk to inflation as "skewed to the upside", meaning the RBA sees a greater chance of inflation surprising higher than lower.

She was explicit about the Board's tolerance, or lack of it. The Board, she said, does not "really have tolerance for inflation to continue to be above target for an extended period". If inflation looked stronger than forecast, "the Board may well have to raise interest rates to tackle that".

Hunter also set out where the RBA can and cannot help. On global oil prices, which she said had "tracked up quite sharply just in the last couple of weeks", higher than assumed in the August statement, she was frank: interest rates "can't do anything about global oil prices". But they can address domestic conditions and help prevent "second-round effects", where an initial shock spreads into broader price rises. She confirmed the Board meets "September 28, 29" and noted the market was pricing about a two-in-three chance of a rise.

The Key Numbers

Underlying inflation: ~3.5% vs 2.5% target. Headline CPI: 3.5% (July 2026). Cash rate: 4.35%. Oil already above August SMP assumptions. September hike odds: ~67%.

What Could Happen Next

The decision lands on 29 September. On Hunter's logic, the trigger for a rise is inflation looking stronger than forecast, so the incoming data will be decisive. The recent sharp rise in global oil prices, higher than the August statement assumed, is a complicating factor: it lifts headline inflation but is not something rate rises can reverse, leaving the Board to focus on whether domestic pressures and second-round effects are building.

If the Board raises the cash rate by 0.25 percentage points, it would move to 4.60 per cent. If it holds, the rate stays at 4.35 per cent, where it has been since May. Either way, Hunter's comments suggest the RBA will keep inflation front and centre in its communication.

The longer horizon remains challenging. The August Statement on Monetary Policy did not expect inflation back to the middle of the target band until around early 2028, implying a protracted period of restrictive policy regardless of the September outcome.

Conclusion

Sarah Hunter's message was unambiguous in its priorities, if not in its conclusion. Inflation is the RBA's top priority, the risks are skewed to the upside, and the Board has limited tolerance for prices staying above target. She distinguished carefully between global forces beyond the RBA's reach, such as oil, and the domestic pressures it can act on. With underlying inflation near 3.5 per cent, the cash rate at 4.35 per cent, and markets pricing roughly a two-in-three chance of a rise, the 28 to 29 September meeting looms as a genuine test of how far the Board's stated resolve translates into action.