March Meeting Preview

Quick take

Markets have repriced quickly through the week. Hold is back as the base case for March, but hike risk remains meaningful and cuts are still a low-probability tail.

The charts above are live, not fixed newsletter numbers, so this URL stays current when you share it. If market pricing swings before the meeting, this page updates without needing a rewritten article.

At a glance

Current pricing still favors no change at the next meeting, but the distribution is wide enough that a surprise hike remains on the table in live markets.

For borrowers, that means the range of plausible outcomes remains wide into decision day, and intraday moves in futures can be sharp when new data lands.

Use the live bar and history chart together: the bar shows where pricing is now, while the history view shows how quickly conviction has changed over recent sessions.

Where we left off

In February 2026, the RBA hiked by 25bp and made it clear inflation was still too high for comfort.

Even after that, markets initially leaned toward a March pause. That is why hike odds started this week from a much lower base.

Coverage: ABC News

What changed this week

1. RBA communication stayed hawkish. Governor Michele Bullock said a March hike had not been ruled out. When the Governor keeps tightening on the table, traders usually reprice quickly. In practice, this shifts the reaction function: markets move from assuming policy has peaked to assigning more probability to another tightening step if inflation momentum does not moderate. Reuters.
2. Growth data came in stronger than expected. Australia's GDP printed around 0.8% q/q and 2.6% y/y. Stronger activity makes it harder to argue inflation pressure is fading quickly. When growth holds up above expectations, markets tend to reduce confidence in near-term easing and push expected rate cuts further out on the calendar. Bloomberg.
3. Energy risk moved higher again. Rising oil prices can feed into transport and broader business costs. That adds upside inflation risk and makes quick rate cuts less likely. Even if domestic demand cools, imported cost pressure can delay the disinflation path and keep policy caution elevated for longer. ABC News.

What this means for borrowers

• Policy is still restrictive, and near-term relief is not the base case.
• A pause is still plausible, but cuts are currently the low-probability outcome.
• Further hikes in 2026 remain a meaningful risk in market pricing.
• Expect volatility in rates pricing into and just after the meeting.

What rates could look like for the rest of 2026

Beyond March, futures pricing still implies a wide range of paths. The key question is whether policy stays around current restrictive levels for longer, or starts to ease later in the year if inflation and activity soften together.

The current base case in pricing is a year-end cash rate around — by the final — meeting, versus — now (roughly — implied).

In other words, markets are not pricing quick relief this year. The dominant message from the curve is "higher for longer," with a meaningful chance that policy either tightens again or stays restrictive deeper into 2026 than many expected earlier in the year.

• If inflation proves sticky, markets can keep pricing a higher-for-longer cash-rate path.
• If growth slows materially and disinflation broadens, late-2026 easing odds would likely rebuild.
• Volatility around each data release matters because it can move both the next-meeting odds and the full year-end path.

What to watch before decision day

• Any late RBA communication that changes tone on inflation persistence.
• Domestic labor-market or inflation-surprise headlines.
• Global commodity moves, especially oil, and associated risk sentiment.
• Whether hike probabilities hold, fade, or accelerate in the final days.