RBA Tracker

As hawkish a cut as you could get

The RBA Board was widely expected to deliver a relatively ‘hawkish’ 25bp rate cut today and that’s what we got. It probably could not have been more hawkish.

Strikingly, Governor Bullock characterised today’s rate cut as reversing the “cautionary” cash rate increase in November 2023.

These statement say it all really:

“[W]hile today’s policy decision recognises the welcome progress on inflation, the Board remains cautious on prospects for further policy easing.”

“The forecasts published today suggest that, if monetary policy is eased too much too soon, disinflation could stall, and inflation would settle above the midpoint of the target range.”

The Board clearly isn’t convinced that the inflation battle has been won.