RBA still on the sidelines and in no rush to cut rates in Australia

Access the data insights report to learn more about the key points outlined below:

• There were no surprises from the RBA at the November meeting, with the board keeping rates on hold at 4.35%. The major takeaways from the RBA’s statement were that they still see the economy as running beyond its capacity, and underlying inflation is still too high for rate cuts to be imminent.

• Rate hikes appear to be well and truly off the table – it has now been a year since the last rate hike. The RBA is playing a patient game of waiting for output to come back to the economy’s potential. This means the recent run of very weak growth is likely to continue, notwithstanding the nascent signs of a pickup in consumption growth. We still expect to see the first rate cut in Q2 of 2025, but the balance of risks around this are shifting toward the first easing coming later, rather than sooner.