The Reserve Bank of Australia (RBA) held interest rates at 4.10% for September, as expected by economists. The markets prepare for the September rate calls from the US Federal Reserve and European Central Bank. China props up its slowdown with drip-feed policies. Australia’s reporting season underscores strong performers.


What’s happened recently? 

  • The RBA held rates at 4.10% for the third consecutive month, marking Governor Philip Lowe’s last decision of his 7-year term
  • The next US Federal Reserve and European Central Bank rate meetings will take place in September
  • China’s drip-feed policy extends to the property market
  • Reporting season in Australia sees Qantas and Woolworths as top standouts
  • The RBA signals it will look at the effects of climate change on monetary policy.

Why did these things happen?


On 5 September, the RBA announced interest rates will remain unchanged at 4.10%. The board minutes highlighted a significant slowdown in consumption growth and noted lagged effects of previous rate hikes yet to fully play out. It said some further tightening may be required, due to the risk of high inflation persisting.


This month’s decision was the third consecutive pause and marked the final interest rate decision from Governor Philip Lowe. He passes the baton to new Governor, Michele Bullock, the first woman to lead the central bank.

The US Federal Reserve’s (The Fed) next meeting will take place on 19-20 September, following its last decision on 26 July where interest rates were increased by 25 basis points to a range of 5.25-5.50%. The latest inflation reports and improvements in employment figures have experts and markets predicting a rate hold for September.


Meanwhile, the Eurozone’s inflation proved stubborn, causing the European Central Bank (ECB) to increase interest rates by 25 basis points to 4.25% back in July. Its next meeting will be held on 14 September. Policymakers are arguing both sides of the coin while economists are split – an indication that it may be a close call. Those who are predicting a hike believe it may be the last for 2023, amid growing recession fears.


Over in China, the country’s economic data was worse than expected and part of the slowdown in global manufacturing seen in the last few months. Its economic response has been to use a drip-feed approach. More recently, policies have been around reducing payments for borrowers and lowering interest rates on existing mortgages, as a way to combat its struggling property market. Notwithstanding these issues, emerging market valuations remain attractive and are discounting a lot of the bad news.

Is there good news?


Australia’s reporting season reflected a similar story to the US reporting season, where results were generally in line with expectations and demonstrated resilience, given the current economic headwinds. The standouts were Qantas and Woolworths Group, posting profits of $2.47 billion and $1.6 billion for FY23 respectively.


The positive news out of earnings season is that certain companies are making a lot of money. This is good for dividends and good for investors.

What could lie ahead?


On 7 September, outgoing Governor Lowe provided some closing remarks during an event in Sydney. He said that recent data provided some comfort for a sustainable return of inflation to the RBA’s target of under 3.0%.


“We need to remain alert to this risk, for, if it were to materialise, inflation would become sticky, which would require tighter monetary policy and more economic pain later on,” Lowe shared.


He added that a lift in productivity growth would be helpful, ultimately allowing stronger growth in nominal and real wages and profits.


Interestingly, incoming Governor Bullock said the RBA will be paying close attention to the effects of climate change on monetary policy in the future, citing “climate change might have important effects on an economy’s capacity to produce goods and services, that is, on potential output”.


Economists believe there will be one more interest rate hike from the RBA this year, as inflation pressures ease. The August RBA minutes noted that board members observed that there was a credible path for inflation to return to target with the cash rate staying at its current level.


Several banks have forecasted an extended pause from the RBA.


As always, key economic indicators will determine the central bank’s decision.

What should I do if I’m concerned about my investments?


If you’re wondering about whether you should make changes to your investments, we recommend connecting with your financial adviser to review your investment goals, identify any potential opportunities, and make changes if necessary. 


If you don’t have an adviser, you can find an adviser near you using our Find an Adviser service at Call us with any general queries on 13 13 36, Monday to Friday, 8:30am to 6pm Sydney time (+612 8397 1100 from outside of Australia).  

Tools and Resources

Stay in touch with CFS

It’s important we have your correct details on file, so you don’t miss any information from us about your account.

Find an adviser

If you don't have an adviser but would like some advice, you can use our find an adviser service to locate one near you.

What role shares play

While you mightn't own shares directly, you may still have exposure to them through other investments like super. 

Unleash in ways you never thought possible

Get in touch

Get in touch with us online or call us
8:30am to 6pm AEST Monday to Friday.

Find a financial adviser

Use our tool to find professional financial advice,

local to you.

Download mobile app

Track your balance and see your 

transactions history from anywhere.

Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.


Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at or by calling us on 13 13 36.