FEAR & GREED | Business News Q+A: The RBA was split on rates - so what happens next?
Mar 17, 2026
Deanna Messina, Deputy Chief Economist at AMP who focuses on monetary policy and macroeconomics. She explains why the RBA vote split 5–4 and the timing tensions behind it. She discusses how Middle East risks and oil shocks affect inflation worries. She breaks down GDP components and rates the chances of a May rate move as about 50/50.
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Split Decision Was About Timing Not Direction
- The 5-4 RBA board split reflected disagreement over timing, not direction, of further hikes.
- Some members wanted a March hike due to rising risks while others preferred to wait for Middle East developments before acting.
Oil Shock Raises Inflation Expectation Risks
- Geopolitical shocks like the Middle East war complicate central bank choices because rising oil can cascade into broad inflation.
- Central banks fear fuel-driven inflation expectations feeding wage demands and widespread price increases.
GDP Breakup Shows Softer Consumption Amid Strong Growth
- GDP breakdown showed consumer spending was softer than the RBA expected while other components and overall growth were stronger.
- The RBA weighed a still-strong labour market and growth above capacity against weaker household spending data.