The Reserve Bank of Australia left its cash rate unchanged at the meeting yesterday, as was widely, nearly unanimously, expected.


Via CBA, the main points from their response to the decision, bolding is mine:

  • The Board did not reinstate its hiking bias and maintained the neutral stance it shifted to at the March Board meeting, as we anticipated .
  • The Board retains full optionality over the future path of the cash rate and has once again stated, “the path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out” .
  • The RBA has upwardly revised its end - 2024 inflation forecast from 3.2% to 3.8 % largely due to the stronger than anticipated Q1 24 outcome as well as higher petrol prices and some higher-than-expected services price inflation.
  • The RBA has retained its forecast for inflation to get back to the target range in H2 2025 and to be around the midpoint by mid-26.
  • The RBA’s forecast for GDP growth has been downwardly revised over 2024, but has been left unchanged over the rest of the forecast horizon.
  • The forecast profile for the unemployment rate has been lowered a touch and the peak in the unemployment rate over the forecast horizon is now 4.3% (from 4.4% previously).
  • Our base case sees the RBA on hold until the November Board meeting when we expect the RBA to commence an easing cycle.

I posted a similar rate cut call from Société Générale here:

From the RBA website:

rba cash inflation cpi rate 08 May 2024 2