RBA Tracker

'Very welcome' CPI paves way for cut, but what then?

We expect that RBA Monetary Policy Board (MPB) to cut the cash rate 25bps to 3.60% next Tuesday. This is the consensus view and is fully priced by markets.

Following Q2 trimmed mean inflation printing close to the Bank’s May SMP forecasts - and below more up-to-date nowcasts - the Board is likely to form the view that inflation remains on track to reach the mid-point of the 2-3% target on a “sustainable” basis.

Observers are likely to have more interest in the outlook and we expect the Board to remain cautious and measured in its assessment of the current and expected state of the Australian economy.

Markets have fully priced another 25bp cut for the November MPB meeting and ~60bps of easing by the end of this year. Around 80bps of cumulative easing is priced in by mid-2026.