13 Aug The RBA cuts for the third time – expect a further gradual easing to 2.85%
Key Points
- The RBA cut its cash rate by 0.25% taking it to 3.6%. This is the third rate cut in this easing cycle.
- The RBA sees inflation running around target but has revised its growth forecasts down again. Its forecasts assume that the cash rate will continue to “follow a gradual easing path”, implying that without further easing, growth and inflation will be lower and unemployment higher than its forecasting.
- We expect the RBA to cut again in November, February and May taking the cash rate to 2.85%.
- The ongoing rate cutting cycle should help underpin a modest further pick up in Australian economic growth to around 1.8% yoy by year end, but with the tariff threat posing some downside risk.
