RBA deliver a rate cut, but it may be in isolation

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

• The RBA has changed its policy rate for the first time since November 2023, cutting the cash rate by 25 basis points to 4.1%. The board has been tasked with putting more weight on labour market conditions in their policy decisions. With the labour market still in an inflationary position and showing few signs of easing, we are a little surprised by today’s decision. But headline inflation is certainly low enough to warrant a cut.

• The case for a cut in February was strong, but not straight-forward. This was reflected in theBank’s very hawkish communications with the decision, that noted they are ‘cautious on prospects for further policy easing’. Accordingly, we expect the Bank will tread lightly from here, delivering only two more cuts in 2025 – to come in the second half of the year.