Commonwealth Bank of Australia economists said stronger-than-expected data point to upside risks for inflation, complicating the Reserve Bank’s path to easing. The bank currently forecasts a 0.7% quarterly and 2.6% annual trimmed mean CPI outcome, but firmer inflation prints and resilient activity data have clouded the outlook.

CBA noted the divergence between improving activity surveys, softer employment growth and hotter inflation, leaving the RBA with a more uncertain policy path. Market expectations have already shifted — pricing for a September rate cut has been fully erased and the odds of a November move have fallen below 50%, from around 80% earlier in the month.

CBA expects the central bank to keep the cash rate unchanged at Tuesday’s meeting, with investors focused on how Governor Michelle Bullock frames the balance of risks in her statement and press conference. The bank still anticipates a 25bp cut in November but cautioned that the decision hinges on Q3 CPI data, with any acceleration in core inflation making a rate cut more difficult. Labour market figures will also be key, it added.

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The RBA Statement is due at 2.30pm Sydney time on Tuesday, September 30, 2025