Rate hold extends government's fiscal headache into 2027

The RBA held the cash rate at 4.35 per cent on 16 June 2026, with Commonwealth Bank economists now expecting no cuts until mid-2027. The Albanese government, returned last year, based its fiscal policy on Treasury projections assuming earlier rate relief. A prolonged hold stretches the timeline for cost-of-living pressure to ease, complicating its economic narrative heading into 2027.