What If Inflation Keeps Falling?
This scenario shows what happens to the rate path if inflation continues to decline, giving the RBA room to cut rates more aggressively. Probabilities are shifted to reflect the changed outlook.
Expected year-end rate (scenario)
2.97%
-138bp from current
Base case year-end rate
3.93%
Current market pricing
Rate path comparison
| Meeting | Base case | This scenario | Expected rate |
|---|---|---|---|
| June 2026 | 81% chance of a hold | 73% chance of a hold | 4.27% |
| August 2026 | 53% chance of a hold | 48% chance of a hold | 4.29% |
| September 2026 | 76% chance of a hold | 68% chance of a hold | 4.23% |
| November 2026 | 73% chance of a hold | 66% chance of a hold | 4.19% |
| December 2026 | 78% chance of a hold | 70% chance of a hold | 4.12% |
| February 2027 | 79% chance of a hold | 71% chance of a hold | 4.04% |
| March 2027 | 77% chance of a hold | 68% chance of a hold | 3.95% |
| May 2027 | 77% chance of a hold | 67% chance of a hold | 3.85% |
| June 2027 | 74% chance of a hold | 63% chance of a hold | 3.75% |
| August 2027 | 74% chance of a hold | 63% chance of a hold | 3.64% |
| September 2027 | 73% chance of a hold | 63% chance of a hold | 3.54% |
| November 2027 | 75% chance of a hold | 65% chance of a hold | 3.44% |
| December 2027 | 100% chance of a 50bp cut | 88% chance of a 50bp cut | 2.97% |