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Wealth Pi Fortnightly Economic Snapshot
Interest Rates
On the 17th of March the RBA increased the official cash rate by 0.25%. The current official cash rate as determined by the Reserve Bank of Australia (RBA) is 4.10%.
The next RBA Board meeting and Official Cash Rate announcement will be on the 5th May 2026.
As at the 17th of March, the ASX 30 Day Interbank Cash Rate Futures May 2026 contract was trading at 95.78, indicating a 57% expectation of an interest rate increase to 4.35% at the next RBA Board meeting.
RBA
According to the RBA’s Monetary Policy Decision of 17 March 2026, cash rate increase reflects concern that inflation pressures had strengthened again and were likely to remain above target for longer than previously expected. While inflation had declined substantially from its 2022 peak, the RBA noted that it picked up materially in the second half of 2025, partly due to stronger capacity pressures. These pressures were linked to stronger-than-expected private demand, resilient business investment, a slightly tighter labour market and continued strength in housing market activity. The conflict in the Middle East had pushed fuel prices sharply higher, creating additional upside risks to inflation and inflation expectations. A longer or more severe conflict could put further upward pressure on global energy prices; this will push up near-term inflation and could also increase inflation further out if it impairs supply capacity or price rises get built into longer term inflation expectations. Higher prices and prolonged uncertainty may cause growth to be lower in Australia’s major trading partners and also in Australia. Although financial conditions had tightened somewhat, the RBA considered the overall restrictiveness of monetary policy uncertain, particularly as earlier rate cuts had not yet fully flowed through the economy. Overall, the decision reflected the Bank’s view that inflation risks had shifted further to the upside and it is expected that the cash rate will still increase by May.
Australian Markets
Australia’s economy entered 2026 with moderate but improving momentum. Real GDP rose 0.8% in the December quarter of 2025 and 2.6% over the year, with both private and public demand contributing to growth, while GDP per capita increased 0.4% over the quarter. Inflation remains sticky rather than fully resolved, headline CPI was 3.8% in the year to January 2026, unchanged from December, while trimmed mean inflation edged up to 3.4%. Labour market conditions remain relatively firm, with the unemployment rate at 4.1% in January and participation at 66.7%. In response to persistent inflation, the RBA raised the cash rate by 25 basis points to 4.10% in March. Forward indicators suggest demand is still mixed, Westpac–Melbourne Institute consumer sentiment improved slightly to 91.6 in March, while NAB business confidence slipped to -1 index points from 4pts in February, indicating that activity is holding up but confidence remains fragile.
Global Markets
According to International Monetary Fund (IMF) January 2026 update, global real GDP growth is projected to remain broadly steady at 3.3% in 2026 and 3.2% in 2027, supported by resilient demand, technology-related investment and easier financial conditions. More recent OECD data suggest growth is holding, but not accelerating materially, OECD GDP growth eased to 0.3% in Q4 2025 from 0.4% in Q3, while annual OECD growth improved to 1.7% in 2025. Inflation has continued to moderate, with OECD headline CPI falling to 3.3% in January 2026 from 3.6% in December 2025, and labour markets remain relatively firm, with the OECD unemployment rate stable at 5.0% in January. External conditions are mixed, G20 merchandise exports rose 0.9% in Q4 2025, while services exports increased 1.4%, and UNCTAD reports that global trade reached a record US$35 trillion in 2025, although the 2026 outlook remains constrained by protectionism, geopolitical fragmentation and slower growth.
Property
Australia’s property market remained resilient in early 2026, although momentum has become more uneven across regions. National dwelling values rose 9.9% over the year to February 2026, although the quarterly pace eased to 2.1%, indicating that price growth is still positive but becoming more moderate. Market conditions are increasingly divergent across states: Perth (+22.0%), Brisbane (+17.3%) and Adelaide (+10.9%) continue to outperform, supported by stronger demand and persistently tight supply, while Sydney (+6.0%) has flattened and Melbourne (+4.7%) remains relatively subdued over past 12 months. Demand has stayed firm, with national sales volumes up 5.5% year-on-year, while advertised supply remains tight, new listings were broadly flat on a year earlier at 41,012 over the four weeks to 1 March 2026, but total listings were down 14.0% year-on-year and 17.8% below the five-year average. Rental conditions also remain constrained, with the national vacancy rate at 1.5% and rents up 5.5% annually to February. On the supply side, dwelling approvals fell 7.2% in January, reflecting persistent constraints on new housing delivery.
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