The Reserve Bank of Australia holds rates steady for a second meeting but warns further tightening remains on the table if inflation risks rise.
The Reserve Bank of Australia left its cash rate unchanged at 4.35% for a second consecutive meeting, a decision aligned with market expectations. The move was unanimous, reflecting a cautious stance amid ongoing inflation concerns.
The RBA strengthened its guidance, emphasizing it will act further if upside risks to inflation materialize. Analysts interpret this as a deliberate signal to temper expectations of near-term rate cuts, despite a steady disinflation trend. Markets had fully priced in the hold, but the hawkish tone surprised some observers.
Volatility in terminal rate pricing is expected to persist, driven by upcoming CPI and GDP data releases in August, September, and November. While two rate cuts are still projected for 2027, the RBA may proceed more cautiously than in past easing cycles.