RBA Weighs Additional Rate Cuts in Response to Economic Indicators

RBA Governor Michele Bullock highlighted that rising costs in home building and market services suggest that inflation may have remained higher than anticipated in the third quarter. Despite core inflation dropping to 2.7% in the second quarter, within the RBA’s target range of 2-3%, recent data implies that this downward trend may not have continued into the third quarter.

Financial conditions have shown signs of loosening, with increases in credit availability and house prices, even though current interest rates are slightly restrictive. The RBA plans to review the third-quarter inflation data, due at the end of October, before its next monetary policy meeting on November 4. Market expectations currently indicate a 45% chance of a rate cut in November, increasing to 70% for December.

For individuals and small business owners, particularly those with limited or poor credit histories, these potential rate cuts could influence borrowing costs and loan accessibility. Staying informed about the RBA's decisions and understanding how they impact personal and business finances is crucial in navigating the evolving economic landscape.