RBA interest rate: Millions dealt back-to-back blows as Australia set to be lone mover amid Iran war

The RBA is not the only central bank meeting this week, but it could find itself being the only one hiking its cash rate.

The Federal Reserve in the US, the European Central Bank, Bank of England and Bank of Japan just so happen to all be meeting in the same week for the first since 2021.

And none of ‘G4’ central banks are expected to raise interest rates.

But if the tone from the accompanying official statements and press conferences reflects the hawkish moves in rate futures markets, the question may soon become when, not if, the tightening will begin.

In the two weeks since the first US-Israeli attacks on Iran on February 28, oil prices have soared through US$100 a barrel, triggering a spike in inflation fears that have reshaped the expected 2026 policy paths around the world.

While rate-setters are supposed to “look through” temporary spikes in energy prices, they are still smarting from their questionable call that the global inflation spike of 2021-22 would be “transitory.”

They’ll be wary of making the same mistake again.

At the same time, the current energy crisis could also result in heavy hits to household spending, consumer and business confidence, and hiring. If growth slows sharply, the temptation to cut rates will be strong.

Ultimately, amid all the noise and uncertainty, rate-setters may feel it is better to sit tight and await more clarity.

Pausing, they can reasonably argue, should not be interpreted as paralysis in this environment.

So let’s consider how these central banks’ expected rate paths have changed since the Middle East conflict erupted, the pressure points each faces, and what steer we can expect from them this week.