RBA Cautious on Further Rate Cuts Despite First Reduction in Years

The Reserve Bank of Australia signals a data-driven approach to future cuts, citing uncertainties in inflation and labor market dynamics.

The Reserve Bank of Australia (RBA) cut interest rates by 0.25 percentage points to 4.1%, its first reduction in over four years, as inflation slowed to 2.4%.
RBA Governor Michele Bullock emphasized a cautious approach to further cuts, citing uncertainties in the labor market and inflationary pressures.
Strong employment growth, with the unemployment rate at 4.1%, has complicated the bank's assessment of inflation risks and full employment levels.
Some economists predict additional rate cuts in April or May, but the RBA indicated decisions will depend on incoming data and evidence of sustained disinflation.
The RBA acknowledged past missteps in delaying rate hikes during the inflation surge and aims to avoid premature easing this time.