A 5-4 vote says everything about the Reserve Bank’s dilemma

March 17, 2026 — 5:11pm

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Five members of the Reserve Bank’s monetary policy committee are worried about inflation right now. Four are more worried about where the economy will be in a few weeks’ time.

That’s the simple takeaway from the bank’s split decision to push the cash rate up by a quarter percentage point on Tuesday.

But there was one person, who didn’t cast a vote one way or the other, who will have a big say on the future direction of interest rates in this country and that debate between inflation hawks and economic doves – Donald Trump.

Expectations of a rate hike were super-charged after Israel and the United States launched their attack on Iran a fortnight ago. Investors and economists, already concerned about domestic inflation and a tight job market, believed the war and its impact on global oil prices (amongst other things) would force the Reserve’s hand.

Market pricing went from about a 15 per cent chance of a rate increase to a three-in-four chance.

RBA interest rates decision as it happened:........

© The Age