Minutes from the Reserve Bank of Australia’s September meeting showed that policymakers unanimously raised the cash rate by 25bps to 4.6%, citing persistent inflation risks. Several upside threats flagged in August had materialised, including Middle East tensions driving oil above forecasts, global cost pressures partly tied to AI demand, and stronger domestic activity. Inflation readings exceeded expectations, with businesses reporting widespread cost pass-throughs. Short-term expectations stayed high, raising concern about medium-term drift. While the labour market eased broadly as anticipated, demand remained firm and capacity pressures stronger than assessed. Members warned that delaying action risked entrenching inflation after a prolonged period above target. They also noted that holding steady could weaken the Australian dollar as other central banks tightened. The priority remained returning inflation to target, with forecasts pointing to a mid-2027 return to the midpoint.