National Australia Bank's chief economist, Sally Auld, has indicated that the Reserve Bank of Australia (RBA) might raise interest rates by the first half of 2026. This potential move is contingent on continued economic growth and further tightening of the labor market. Auld noted that Australia is nearing full employment, with limited spare capacity, which could trigger inflationary pressures through increased wages and capacity-driven price hikes. This outlook is more aggressive than current market expectations and could bolster the Australian dollar if economic data exceeds forecasts.