RBA lowers cash rate to 3.85%
The Reserve Bank of Australia (RBA) has announced a reduction in the cash rate by 25 basis points during its meeting today. This decision is consistent with predictions from economists and financial institutions. The RBA explained that this decision is based on evidence indicating that inflation is continuing to ease. The annual trimmed mean inflation rate is 2.9%, marking the first time it has fallen below 3% since 2021. Headline inflation stands at 2.4%, remaining within the target range of 2–3%.
The RBA indicated that headline inflation may rise over the coming year, and underlying inflation is expected to be around the midpoint of the 2-3% range throughout the forecasted period. The board decided based on current data that inflation has become more balanced and is expected to remain around target. The board will continue to closely monitor changes in the global economy, financial markets, domestic demand trends, and the inflation and labour market outlook.
Looking ahead, the RBA's next scheduled meeting is July 7th and 8th, where further monetary policy decisions will be discussed in light of evolving economic indicators.