The Reserve Bank of Australia held the cash rate unchanged at 4.35% in June 2026, as inflation remains elevated and growth shows signs of slowing following prior tightening.

• The Board kept the cash rate target at 4.35% (0 bps change), with a unanimous decision, indicating a pause to assess the impact of earlier rate hikes.
• Inflation has remained elevated, with both headline and underlying measures described as still too high, reflecting persistent price pressures despite some recent easing in oil prices.
• Energy and related commodity prices remain above pre-conflict levels, and firms are increasingly passing through higher costs to consumers, suggesting ongoing inflationary pressure from input costs.
• Short-term inflation expectations have eased but remain higher than earlier in the year, indicating some moderation but still elevated expectations relative to prior periods.
• Financial conditions have tightened following three earlier rate hikes, with higher money market rates, bond yields, and an appreciating exchange rate, contributing to slower economic momentum.
• Consumer spending growth has begun to slow and housing market conditions have softened, with prices declining in some capital cities, indicating the impact of tighter policy on demand.
• Labor market conditions are mixed, with a higher-than-expected unemployment rate in April but otherwise resilient indicators, suggesting some softening without broad deterioration.
• The outlook remains highly uncertain, with risks that inflation could be higher and growth lower depending on the persistence of energy supply disruptions and global uncertainty.
• The Board emphasized that inflation is likely to remain elevated for some time and remains prepared to tighten further if necessary, while monitoring the effects of prior policy adjustments.