The hawkish minutes combined with high CPI have prompted major banks like Goldman Sachs and CBA to shift towards hawkish predictions: The Reserve Bank of Australia may raise interest rates again as early as September.

Australia's high inflation has led economists from Goldman Sachs to the Commonwealth Bank of Australia (CBA) to predict that interest rates will rise again as early as next month, abandoning previous expectations of no rate changes for the remainder of the year. This shift follows a Wednesday inflation report that showed price pressures remain elevated, and previously, minutes from the Reserve Bank of Australia's August meeting indicated a low tolerance for rising consumer prices. Australia's largest bank, the Commonwealth Bank of Australia, stated on Thursday that the inflation data will cause the RBA to "lose patience," forecasting an increase of 25 basis points to 4.6% in November, while also noting that there could be changes during the meeting on September 28-29. Belinda Allen from the bank said, "The Australian economy needs tighter monetary policy." Economists from ANZ Bank and Goldman Sachs also expect the RBA to raise rates in November, with Goldman Sachs also considering the possibility of a rate hike in September. Phil Odonaghoe from Deutsche Bank was the first to adjust prior predictions after the CPI data was released on Wednesday, further predicting that the RBA would hike rates in September and stating that underlying inflation "is intolerably high." Sally Auld from the National Australia Bank also shifted her prediction to expect a rate hike in September, noting that "the risk of another rate increase in November is high, especially if economic activity data shows resilience in the upcoming months." Influenced by the hawkish minutes and inflation data, Australian bond prices fell for three consecutive days. The yield on the sensitive three-year government bonds rose by 7 basis points to 4.67% during early trading, reaching a new high for over a month, further increasing market expectations for a November rate hike. Traders have fully priced in a 25 basis point rate increase at the November meeting, up from approximately 48% earlier this week. They estimate the likelihood of a rate hike next month to be around 50%. The RBA has raised interest rates in each of its first three meetings this year, completely ending the brief easing policy implemented in 2025, and restoring the cash rate to 4.35%. This was done to address resurgent inflation, which had started to rise even before the U.S.-Iran war created energy shocks to the global economy and intensified price pressures. Due to over a decade of low productivity, Australia's potential growth rate has declined, making the country more susceptible to inflationary pressures. Other economists have maintained expectations for rates to stay unchanged, including Westpac Banking Corp. The bank stated in a report, "While there is still a risk of a rate hike in November, we do not consider this our baseline expectation." Paul Bloxham from HSBC HOLDINGS also noted potential risks in further rate hikes by the RBA. He pointed out, "It is important to note that the RBA currently views monthly CPI data as a partial signal," and stated that the RBA believes that it will take years for the monthly data to be fully reliable. He added, "Weak economic growth and falling housing prices are expected to exert downward pressure on inflation during the forecast period." The RBA's inflation target is to reach the midpoint of its 2-3% target range, a level it has not achieved in the past five years. Ahead of the September decision, there are no other official inflation data, and traders and economists will closely monitor the upcoming second-quarter GDP and labor market data released next week for further clues.