The RBA watch tool — market-implied RBA rate probability for every Board meeting, recalculated daily
The Reserve Bank of Australia's Board meets regularly to assess monetary policy stance and economic conditions. Rate change probabilities are calculated based on Australian short term interest rate curve data, as far as available.
These probabilities are calculated using the ASX methodology. Under this methodology, the results differ from adding up the granular CME-style probabilities shown further below. For a comparison of the ASX and CME methodologies — and why both are correct — see ASX vs CME: two ways to read rate probabilities.
Based on the official ASX rate tracker methodology. Two-outcome model: either a 25bp move or no change.
Probability of each possible cumulative rate outcome by a given meeting (−50bp, −25bp, no change, +25bp, +50bp, …). The per-meeting moves are chained across the meeting sequence using the expanding-tree method to produce the full distribution of where the cash rate could stand after each decision. These figures are computed in our backend with the same method used for the Fed and ECB pages, so summing the granular hike outcomes differs from the ASX single-step figures above — see ASX vs CME methodology.
Source: ASX Rate Tracker · Data as of 2026-09-13 · ASX vs CME methodology
Based on ASX 30-Day Interbank Cash Rate Futures (IB contracts). The implied rate for each contract shows where markets expect the RBA cash rate to average in that month.
Source: ASX Rate Tracker · Data as of 2026-09-13
Reserve Bank of Australia Analysis's next policy meeting is scheduled for 29 September 2026. The current market-implied probability of 25bp hike is 76%.
The Reserve Bank of Australia Board meets 11 times per year (monthly except January) to set the cash rate target. Rate change probabilities are calculated based on ASX 30-day interbank cash rate futures, as far as available.
| Meeting | Move at this meeting | Rate level by this date (cumulative — includes moves priced for earlier meetings) | |||
|---|---|---|---|---|---|
| Expected | higher | same | lower | ||
| September 29, 2026 | 76.0%+19.0 bp | 4.54% | 76.0% | 24.0% | 0.0% |
| November 3, 2026 | 24.0%+6.0 bp | 4.60% | 100.0% | 0.0% | 0.0% |
| December 8, 2026 | 0.0%no fresh move priced | 4.60% | 100.0% | 0.0% | 0.0% |
Each column is one meeting; each row is a policy rate level. Darker means the market puts more weight on that level being in force after that meeting. The outlined row is today’s rate. Read down a column for one meeting’s full distribution — each column sums to 100%.
Shading: share of probability on that rate level. Blank cells carry under 0.5%.
While the empirical probabilities above show what financial markets expect (based on yield curve pricing), the theoretical rate below shows what economic models suggest the RBA should do based on current economic conditions like inflation and growth.
Comparing these helps us understand whether the market expects the RBA to follow economic theory, or if they expect the RBA to take a different path for practical reasons.
The following analysis compares market-implied rate expectations with model-based theoretical rates calculated using a policy-rule framework adapted for Australia. This comparison provides insight into the market's assessment of the RBA's reaction function relative to economic fundamentals.
| Indicator | Current | Target/Neutral | Gap |
|---|---|---|---|
| Inflation | 3.70% | 2.00% | +1.70 pp |
| Output Gap | 0.14% | 0.00% | +0.14 pp |
| Unemployment | 4.43% | N/A | N/A |
We use a Taylor-rule style benchmark for Australia. The model starts with a neutral rate, adds current inflation, and then adjusts for inflation being above or below the target band and for whether the economy is running hot or soft.
Inflation and the output gap are the direct inputs in the simplified rule. Unemployment is shown as an additional labour-market cross-check that helps interpret economic slack.
See the full Taylor Rule methodologyPolicy-rule mapping: the theoretical RBA rate is calculated using a Taylor-rule style specification in which observed inflation enters both in levels and relative to target, while economic slack enters via the output-gap term.
Here, $r^*$ is the neutral real rate, $\pi_t$ current inflation, $\pi^*$ the inflation objective, and $y_t$ the output gap. Unemployment is included as a supplementary slack indicator. Full derivation and assumptions are documented on the Taylor Rule methodology page.
The theoretical rate is calculated using a Taylor Rule style framework adapted for Australia. It considers:
When actual rates are below the theoretical rate, policy is considered accommodative. When above, policy is restrictive.
Model: RBA Policy Rule Framework
Specification:
Where: $i_t^*$ = theoretical policy rate, $r^*$ = neutral real rate, $\pi_t$ = current inflation, $\pi^*$ = inflation target, $\text{Gap}_t$ = output gap, $\alpha$ and $\beta$ are policy response coefficients.
For broader model documentation and framework context, see the Reserve Bank of Australia Economic Models page.
Empirical Probabilities:
Economic Indicators:
Explore detailed discussion of RBA modeling frameworks and assumptions
View Reserve Bank of Australia Economic ModelsValidation: Model outputs are continuously compared against RBA communications and consensus expectations.
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Fireside chat by Mr Christopher Kent, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, at Reuters NEXT Newsmaker Interview: LSEG Insight Series, Sydney, 13 August 2026.
Text of the Sir Douglas Copland Memorial Lecture to the Economic Society of Australia (Victoria) by Mr Andrew Hauser, Deputy Governor of the Reserve Bank of Australia, Melbourne, 24 June 2026.
Speech by Mr Christopher Kent, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, at the Reserve Bank of Australia, Sydney, 29 June 2026.
Address by Ms Sarah Hunter, Assistant Governor (Economic) of the Reserve Bank of Australia, to the Australian Conference of Economists, Canberra, 8 July 2026.
Speech by Ms Michele Bullock, Governor of the Reserve Bank of Australia, at the Anika Foundation Fundraising Lunch, Sydney, 28 July 2026.
Speech by Ms Michele Bullock, Governor of the Reserve Bank of Australia, at the Anika Foundation Fundraising Lunch, Sydney, 28 July 2026.
Address by Ms Sarah Hunter, Assistant Governor (Economic) of the Reserve Bank of Australia, to the Australian Conference of Economists, Canberra, 8 July 2026.
Speech by Mr Christopher Kent, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, at the Reserve Bank of Australia, Sydney, 29 June 2026.
Text of the Sir Douglas Copland Memorial Lecture to the Economic Society of Australia (Victoria) by Mr Andrew Hauser, Deputy Governor of the Reserve Bank of Australia, Melbourne, 24 June 2026.
Remarks by Mr Brad Jones, Assistant Governor (Financial System) of the Reserve Bank of Australia, at the Australian Banking Association's Conference – Banking 2026, Melbourne, 17 June 2026.
Remarks by Dr Kevin Greenidge, Governor of the Central Bank of Barbados, at the annual conference of the Insurance Association of the Caribbean, Bridgetown, 8 June 2026.
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