Monetary Policy Decision

Media Conference – 16 JUNE 2026

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Decision
The cash rate target was unchanged at 4.35 per cent. The policy decision was unanimous.

Inflation
Headline and underlying inflation remain too high. Oil prices have eased recently, although energy and most related commodity prices stay above where they were prior to the conflict in the Middle East. Disruption to global oil supply is adding directly to inflation, and higher fuel costs are passing through to a wider range of goods and services, keeping inflation high for now. Firms experiencing higher input costs are increasing the prices of their goods and services, with more expected to follow. Short-term measures of inflation expectations have eased, yet they are anticipated to anchor above target.

Economic and Labour Market Conditions
Economic conditions have tightened this year following three increases in the cash rate target. Consumer spending is slowing as expected. Housing market momentum has weakened, with prices declining in several capital cities. Labour market conditions remain resilient, and credit continues to be readily available to households and businesses. Looking forward, resolution of conflict in the Middle East is still at an early stage, with heightened uncertainty around inflation pressure and weaker economic activity. Prolonged uncertainty may also reduce growth in Australia’s major trading partners.

Monetary Policy Stance
The Board remains focused on preventing inflation from becoming embedded once the impulse from higher oil prices has passed. Achieving this requires the cash rate target to remain restrictive. The Board will take any action it considers necessary to achieve this outcome, including further increases in the cash rate target if required.