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6d ago

RBA Expected to Cut Rates Below 4% for First Time Since 2023

The Reserve Bank of Australia is widely anticipated to announce a 0.25% cash rate reduction to 3.85% as inflation stabilizes within target and global trade risks persist.

The Reserve Bank will have a lot to consider ahead of its decision.
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Overview

  • The Reserve Bank of Australia will announce its decision on Tuesday at 2:30 pm AEST following its two-day meeting, with most economists predicting a 0.25% rate cut.
  • If the cash rate is reduced to 3.85%, it would mark the first time since May 2023 that rates have fallen below 4%, easing pressure on borrowers after years of elevated mortgage costs.
  • Inflation metrics are now within the RBA’s target range, with headline inflation at 2.4% and underlying inflation at 2.9%, supporting the case for further monetary easing.
  • Global trade uncertainties, particularly stemming from US–China tariff fluctuations, remain a key consideration for the RBA as it evaluates risks to economic stability.
  • A 0.25% rate cut would save borrowers approximately $100 per month on a $600,000 mortgage, providing relief after record interest payments totaling $290 billion since 2022.