Overview

• The July 7–8 meeting saw the RBA board vote six to three to maintain the cash rate at 3.85%, surprising markets that had been betting on a 25 basis point cut.
• Minutes reveal the majority viewed recent monthly CPI readings as too volatile and judged the labour market still tight, arguing against a rapid easing cycle.
• All nine board members agreed underlying inflation is set to decline further, underpinning a commitment to gradual future rate reductions.
• June’s unemployment rise to 4.3% and only modest private demand recovery reinforced the case for waiting on more economic data.
• Market futures now fully price in a 25 basis point cut at the August 12 meeting and project rates to fall toward 3.2% by year-end.