RBA Interest Rate Decision Hinges on Inflation Print
The Reserve Bank of Australia (RBA) is set to make its next interest rate decision on August 11, and market participants are eagerly awaiting Wednesday's inflation print for clues. The June quarter consumer price index will be a crucial data point in this decision-making process.
Economists are divided on the outcome, with some expecting the cash rate to remain unchanged at 4.35%, while others forecast another hike. Westpac is still predicting an increase, despite the RBA's careful language in its June statement.
The most recent monthly reading showed annual inflation at 4.0% in May, down from 4.2% in April. However, trimmed mean inflation rose to 3.6%, the highest since September 2024, and remains above the target band of 2-3%. Services inflation also picked up to 3.7%, while housing costs rose 6.5% over the year.