Central bank watchers are waiting on more colour from the "robust" conversation at the Reserve Bank's last board meeting as they try to predict its next move.
Minutes from the RBA's March meeting will be released on Tuesday and will be closely picked over after it ended in a 5-4 split in favour of a hike - the narrowest decision since the RBA started publishing unattributed votes in July 2025.
"The RBA’s meeting minutes ... will attract attention for additional information on the 'robust discussion' behind the Board's split 5-4 decision earlier this month," said analysts at JP Morgan, quoting governor Michele Bullock's characterisation of the meeting.
Ms Bullock said the disagreement was a question of timing rather than direction, with the four doves arguing to wait until May to get a clearer picture of the impact of the Iran war, but agreeing that more tightening was required to get inflation under control.
Forecasters at all of Australia's big four banks expect the RBA to hike again in May, which would put the cash rate back at its peak before the start of the cutting cycle in February 2025.
Westpac chief economist now predicts the central bank to go five from five, with additional hikes in June and August, which would leave the cash rate at the highest level in 18 years.
The RBA's inflation fears would have been heightened further by the federal government's decision to halve the fuel excise, ostensibly to support households as the cost of living bites.
"There’s a chance that, what governments give us via extra handouts, the Reserve Bank will taketh away by having rates higher than they’d otherwise be," said independent economist Chris Richardson.
Handing more money to consumers will only increase demand without adding to supply at a time when the RBA is already concerned that the economy is over capacity, economists warn.
