10-year bond rate in Australia - Data and Analysis (1970-2034)

IBISWorld forecasts the 10-year bond rate to rise by 0.50 percentage points in 2026-27, to average 5.12%. In February, March and May 2026, the RBA lifted the cash rate three consecutive times, bringing the cash rate from 3.6% to 4.35%. These hikes represent the first since November 2023. The central bank has attributed the decision to persistent and increased inflationary pressure, which is running above its 2-3% target. According to the central bank, the private sector, including households and businesses, is raising spending, driving up price pressures and economic growth quicker than previously anticipated. Global energy prices have also surged due to tensions in the Middle East, driving up transport prices and, in turn, Australia's inflation. While the RBA held rates in June and August 2026, underlying price pressures have remained persistent, with trimmed mean inflation holding at 3.6% over the 12 months through July 2026. The central bank has maintained a firmly hawkish stance, noting that upside risks from the Middle East conflict and higher oil prices are materialising, and that inflation is not expected to return to the target midpoint until late 2027. These factors are expected to exert upward pressure on the 10-year bond rate in 2026-27. Over the past few years, the 10-year bond rate has moved largely in line with the cash rate, which is determined by the RBA. The 10-year bond rate is affected by investor expectations regarding the medium-term direction of the cash rate. The 10-year rate tends to lead the short-term rates because of forward guidance given by the RBA and investor expectations and forecasts for the domestic economy.Although interest rates in 2021-22 were higher than rates in 2020-21, they remained at historically low levels as central banks worldwide responded to the pandemic-induced recession, including in Australia. As economic conditions stabilised and inflationary pressures mounted, central banks, including the RBA, began to raise rates, leading to a substantial increase in the 10-year bond yield over the past five years. The RBA started raising rates in May 2022. Further cash rate rises have occurred in several monthly meetings through June 2023 to tackle inflation. The tight labour market and low labour underutilisation also contributed to the central bank's decision to hike rates. In its November 2023 meeting, the cash rate rose to 4.35%, marking its highest level since December 2011. However, as inflationary pressures and output growth eased, the RBA reduced the cash rate by 25 basis points in February, May and August 2025. These cuts partially offset the rise in the 10-year bond rate over the past few years, but weren't sufficient to counteract the overall upward trend in interest rates. Overall, IBISWorld forecasts the 10-year bond rate to increase at an average annual rate of 0.59 percentage points over the five years through 2026-27.