Archive

December 09, 2025
AU.png

Inflation Resurgence Tests RBA Patience

  • The RBA held rates at 3.60% despite inflation surprising at 3.8% and signs of broader price pressures, reflecting uncertainty about data persistence and mixed demand signals.
  • Recent wage and unit labour cost strength alongside tight labour market conditions have shifted the rate outlook from cuts to potential hikes within twelve months if pressures persist.
  • The Board signals a willingness to tighten if inflation or demand accelerates, but emphasises data dependency (inflation and labour markets) through February 2026.
November 04, 2025
AU.png

RBA: Cautious Hold in Uncertain Times

  • The RBA held its cash rate at 3.6% as anticipated, but its decision marks a shift from easing after September's inflation surprise, signalling an extended pause in rate cuts through at least mid-2026.​
  • Central forecasts now project trimmed mean inflation above 3% for the coming quarters before settling at 2.6% in 2027, requiring mildly restrictive policy rates of 3.4% by mid-2026—materially slower easing than many forecasters anticipated.​
  • Labour market softening provides limited comfort as elevated vacancies and wage pressures persist. Two-sided uncertainty around demand strength and the global outlook creates risks justifying a cautious approach to future cuts.
September 30, 2025
AU.png

RBA Holds at 3.6%: Inflation Concerns Temper Easing

  • The RBA holds at 3.6% as expected, but warns that Q3 inflation may exceed forecasts, with the underlying decline slowing.
  • Stronger Q2 GDP growth (1.8% annually) and a resilient labour market (4.2% unemployment) complicate the easing outlook amid a recovery.
  • A November rate cut remains possible but less likely, with banks split between November 2025 and May 2026 for the next move.
August 12, 2025
AU.png

RBA Cuts as Productivity Concerns Grow

  • The RBA cut rates by 25bp to 3.60%, as expected, in the third reduction of 2025, with unanimous board support following July's surprise 6-3 hold pending inflation data.
  • The central bank downgraded its productivity growth assumption to 0.7% from 1.0%, lowering medium-term GDP forecasts and signalling structural economic challenges ahead.
  • The Governor signals that a "couple more" cuts are likely, with the cash rate path expected around 3.0% by 2026, while maintaining a data-dependent approach to future policy decisions.

By country