Another .25% Rate Cut!
The Reserve Bank of Australia, after it's meeting today cut the official cash rate by 25 basis points to 3.85 per cent. The Reserve Bank's Governor Michelle Bullock flagged the prospect of more rate cuts if inflation stayed sustainably within the 2 to 3 per cent target band, as the bank forecasts.
Assuming banks pass the latest cut on in full, it will mean the median mortgage-holder with a $600,000 debt will pay about $90 less a month in interest.
In making its decision the Reserve Bank considered the following:
- Headline inflation had moderated considerably from a peak of 8 per cent in December 2022.
- Uncertainty from Donald Trump's tariffs is impacting the global economy.
- The domestic economy is recovering from a low point.
- The labour market remains resilient.
- Consumer spending will be slower to recover than previously expected.
- Low inflation and full employment remain the RBA's two major goals.
- The RBA is willing to cut interest rates aggressively if Trump's trade war ramps back up.