Background
The Reserve Bank of Australia (RBA) is set to announce its monetary policy decision following the November 2-3, 2026 meeting of its Monetary Policy Board. This decision will focus on any adjustments to the cash rate target, which directly influences borrowing costs, inflation, and economic growth in Australia. The RBA’s approach to interest rates has been closely watched amid a global environment of shifting inflation dynamics and economic uncertainty.
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Given the RBA’s mandate to maintain price stability and support sustainable economic growth, the November meeting is particularly important. It comes after a period of relative stability in rates, with the central bank balancing inflation pressures against signs of slowing economic momentum. The official resolution will be based on the change in basis points relative to the rate before the meeting, with any adjustments rounded to the nearest 25 basis points.
Candidate Analysis
Over the past two weeks, several key developments have shaped expectations for the RBA’s November decision. First, recent inflation data released in late October showed a modest easing in headline inflation, with the Consumer Price Index rising by 0.3% month-on-month, suggesting inflationary pressures may be cooling. Second, employment figures indicated a slight slowdown in job growth, with the unemployment rate steady at 3.8%, hinting at a softening labor market. Third, the Australian dollar has remained relatively stable against the US dollar, reflecting cautious sentiment among investors. Finally, the RBA’s own communications, including speeches by Governor Philip Lowe, have emphasized a data-dependent approach, signaling no immediate urgency to tighten policy further.
These facts strongly support the scenario of no change in the cash rate at the November meeting. The inflation moderation reduces the need for further tightening, while labor market signals and cautious central bank rhetoric suggest a pause. In contrast, the case for a 25 basis point increase is weaker. Although some inflation components remain sticky, recent data do not justify an immediate hike. The possibility of a rate cut, either by 25 or 50 basis points, is even less supported given the still-positive economic indicators and the RBA’s cautious stance on easing.
That said, uncertainty remains around the trajectory of global commodity prices and potential external shocks, which could influence inflation and growth outlooks. The RBA’s forward guidance will be critical in clarifying its next steps.
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Market Signals
Market indicators show a strong preference for no change, with approximately 73.5% probability assigned to this outcome. The volume of activity backing this scenario is significantly higher than for any rate adjustment, reflecting broad consensus. The second most supported outcome is a 25 basis point increase, but it holds less than 27% probability and has seen modest recent gains in interest. Smaller probabilities are assigned to rate cuts or larger hikes, with minimal trading volume and liquidity. Price movements over the past day and week have been relatively stable, reinforcing the view of a likely pause.
Our Verdict
The most plausible outcome for the RBA’s November 2026 meeting is maintaining the current cash rate. The recent inflation data showing easing pressures, combined with steady employment figures and the RBA’s cautious communication, all point toward a decision to hold rates steady. This aligns with the central bank’s emphasis on monitoring incoming data before making further moves.
Confidence in this outcome is high because the key economic indicators do not currently justify tightening or loosening monetary policy. The inflation slowdown reduces urgency for a hike, while the labor market and growth signals do not support a cut. The RBA’s own messaging has consistently highlighted patience and data dependency, reinforcing this stance.
That said, several triggers could shift this assessment. First, any unexpected inflation spike or wage growth acceleration before the meeting could prompt a rate increase. Second, a sudden deterioration in global economic conditions or commodity prices might push the RBA toward easing. Third, official statements or minutes released ahead of the meeting could provide clearer guidance on the board’s leanings. Monitoring these developments will be essential in the days leading up to the announcement.
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