RBA Keeps Cash Rate Steady Amid Ongoing Inflation Concerns

The Reserve Bank of Australia (RBA) has decided to keep the cash rate at 4.35 per cent, giving homeowners a reprieve from further mortgage pain. This decision was widely predicted by financial experts, including those at major banks.

However, RBA governor Michele Bullock has reiterated that future hikes remain on the table as long as inflation remains above target. The board is determined to ensure that expectations of higher inflation do not become embedded in price and wage-setting decisions.

Bullock said the RBA predicts inflation will remain above target until late 2027, but economic factors such as falling house prices and a softening labour market could indicate the three hikes to the cash rate in the first half of the year have been effective in restricting growth in the economy.