- Reserve Bank hints next move is rate cut
The Reserve Bank has given a strong hint interest rate cuts are coming even though inflation is still too high.
The minutes of the RBA’s December meeting have suggested the next move was now likely to be a cut should inflation fall towards its two to three per cent target.
‘If that were to occur, members concluded that it would, in due course, be appropriate to begin relaxing the degree of monetary policy tightness,’ it said.
This is a big change from November when Reserve Bank Governor Michele Bullock hinted a rate rise was still possible.
‘We’re watching the data closely and we’re not ruling anything in or out,’ she said then.
‘So, the reason I say we’re not ruling anything in or out is we do think that there are still some risks on the upside.’
The Reserve Bank of Australia cash rate of 4.35 per cent is now 110 basis points higher than Canada’s equivalent policy rate of 3.25 per cent, following four rate cuts in 2024.
New Zealand also has a lower cash rate of 4.25 per cent following three rate cuts this year that have failed to stop a recession.
The Reserve Bank has given a strong hint interest rate cuts are coming even though inflation is still too high (pictured are Sydney shoppers)
This is a big change from November when Reserve Bank Governor Michele Bullock hinted a rate rise was still possible
