Persistent above-target inflation and the Reserve Bank of Australia’s hawkish September communications have anchored trader expectations for limited movement at the December 8 meeting. The cash rate sits at 4.60% following the unanimous 25-basis-point hike on September 29, driven by trimmed-mean inflation holding at 3.6% and headline CPI reaching 4.0% in August amid Middle East energy shocks, domestic capacity pressures, and pass-through from higher input costs. Markets price only modest additional tightening by year-end, reflecting the cumulative impact of 100 basis points of hikes in 2026 and signs of slowing growth. Key upcoming catalysts include the November 3 decision and the October 28 CPI release, which will clarify whether further tightening is required to return inflation sustainably to the 2–3% target.