RBA hikes the Cash Rate by 25bps to 3.60%, as expected with the decision unanimous, while it stated inflation remains elevated and some of the upside risks in August are materialising

A fully expected, unanimous 25bp move of this kind typically re-prices very little at the front end on the decision itself; the information content sits in the statement language, and here the retained tightening bias, with further increases explicitly flagged if required, keeps the meeting-to-meeting path live rather than signalling a peak. The distinguishing feature is the rationale: the board is tightening into an energy supply shock, citing Middle East conflict and oil prices running above its own forecast assumptions. Supply-driven inflation episodes have historically split central banks between those that look through the first-round price level effect and those that respond to second-round risks to expectations; this statement places the RBA in the latter camp, which matters for how the rates market treats each subsequent upside inflation surprise. The countervailing language, three hikes having tightened conditions and momentum fading with the labour market easing, is the standard two-handed framing that has preceded pauses in past cycles, so the tell is which strand dominates next: monthly inflation prints and wages data against the energy pass-through, and whether the conflict scenarios in the statement harden into base case. The transmission channels to watch are the short end of the Australian curve and the AUD rates differential, where hawkish energy-driven repricing has tended to support the currency only while risk sentiment holds.