Goldman sees RBA minutes as opening door to November rate rise

Under Goldman’s interpretation, the chance that the RBA’s next move arrives earlier than its baseline forecast has increased. That makes the third-quarter CPI report the key event for the Australian dollar and for short-dated bond yields. With the minutes placing domestic capacity at the centre, the focus shifts from energy pass-through to underlying inflation; even a modest headline number could carry hawkish weight if services and core prices remain firm. Oil remains a secondary factor: the minutes said Australian fuel prices were tracking far above the RBA’s August estimates, and another crude jump tied to the Iran war would add weight to the tightening argument. With market pricing already tilting toward more hikes before the September gathering, a hot CPI print could quickly solidify November expectations.

Goldman is not yet predicting a move in November, but it believes the RBA minutes have left the door ajar; the CPI release due later this month will determine whether the board steps through.

Key points:

• Goldman Sachs economists see the RBA’s September meeting minutes as more hawkish than the press conference held after the decision, pointing to three reasons.
• For one, the minutes revealed greater concern over domestic capacity pressures, with July’s upside inflation surprise treated as confirmation.
• Goldman continues to forecast the RBA holding the cash rate at 4.60% in November, while saying the minutes reduced the hurdle for another increase, subject to third-quarter CPI.
• According to the minutes, the board saw excess demand as larger than earlier thought and repeated its readiness to lift rates further if needed.
• The third-quarter CPI numbers land on 28 October, before the RBA’s 2 to 3 November meeting.

The September meeting minutes from the Reserve Bank of Australia probably reduced the threshold for another rate rise in November, in the view of Goldman Sachs economists. The bank’s own expectation remains that rates will be left unchanged.

Writing in a note, three Goldman economics researchers said they read Tuesday’s minutes as more hawkish than Governor Michele Bullock’s post-meeting press conference, on three counts. Their specific point was the minutes’ increased concern over domestic capacity constraints, with the board treating July’s stronger-than-expected CPI as confirmation.

Goldman still sees the RBA keeping the cash rate at 4.60% at the next meeting. Even so, it concluded that the minutes have reduced the bar for a November hike, with the third-quarter CPI report the deciding factor.

The record backs that interpretation. It shows the board voting unanimously for a 25-basis-point increase at the 28 to 29 September meeting, citing several upside inflation risks identified in August that had either materialised or were taking shape. Those risks ranged from a wider Middle East conflict lifting oil prices, cost strains from the worldwide AI boom, and tighter domestic capacity than anticipated. Board members said excess demand in the economy looked larger than earlier estimates. Staff, meanwhile, increasingly doubted whether the unemployment rate compatible with target inflation was actually higher, and business surveys indicated a gradual rise in company inflation expectations.

The board likewise observed that a rise in global neutral rates would mean the earlier 4.35% cash rate was less restrictive than it had been two years ago. Keeping policy unchanged while other central banks tightened could ease Australian financial conditions via a softer currency, it judged. The members concluded by saying they would stay alert to incoming information and lift rates again if necessary.

The third-quarter CPI report, scheduled for 28 October at 00:30 GMT (20:30 ET on 27 October), is now the pivotal release. The RBA’s next policy decision comes on 3 November at 03:30 GMT (22:30 ET on 2 November), together with fresh quarterly projections. A firm result for underlying and services inflation would put Goldman’s on-hold view under pressure and might lead the board to hike for a second straight meeting.

If no move comes in November, the RBA gets another chance in December, followed by a long recess until its 8–9 February 2027 meeting.