Cash rate -
* The board increased the cash rate target by 25 basis points to 3.35%
* The interest rate on Exchange Settlement balances also rises by 25 basis points to 3.25%.
Employment -
* The labor market remains tight, with the unemployment rate steady at around 3.5%, the lowest since 1974.
* Job vacancies and job ads are at high levels but have slightly declined recently.
* Economic growth slowdown is expected to lead to an increase in unemployment, with a projected rate of 3.75% by the end of this year and 4.5% by mid-2025.
Wages -
* Wages growth is picking up due to the tight labor market and higher inflation.
* The Board will closely monitor labor costs and price-setting behavior to avoid a prices-wages spiral.
Inflation -
* Global inflation remains high but is moderating due to lower energy prices, supply-chain improvements, and tighter monetary policy.
* In Australia, CPI inflation reached 7.8% in the year to the December quarter, the highest since 1990.
* Inflation is expected to decline this year due to global factors and slower domestic demand, with a central forecast of CPI inflation declining to 4.75% this year and around 3% by mid-2025.
* Medium-term inflation expectations remain well anchored.
Housing -
* Household balance sheets are being affected by the decline in housing prices.
* Uncertainty exists regarding the timing and extent of the expected slowdown in household spending.
* Some households are experiencing a painful squeeze on their budgets due to higher interest rates and the increase in the cost of living.
Other -
* The Australian economy experienced strong growth in 2022, but GDP growth is projected to slow to around 1.5% in 2023 and 2024.
* Uncertainty exists regarding the timing and extent of the expected slowdown in household spending, household budgets being affected by higher interest rates and the cost of living, and the decline in housing prices.
* The Board's priority is to return inflation to the 2-3% target range while keeping the economy stable.
* Further interest rate increases are expected to ensure temporary high inflation and achieve the inflation target.
* The Board will pay close attention to global economic developments, household spending trends, inflation outlook, and the labor market when assessing future rate adjustments.
Cash rate -
* The Board raises the cash rate target by 25 basis points to 3.60%.
* The interest rate on Exchange Settlement balances also increases by 25 basis points to 3.50%.
Employment -
* The labor market remains tight, although conditions have eased slightly.
* The unemployment rate stays close to a 50-year low, but employment fell in January.
* Some firms report a recent easing in labor shortages, but as economic growth slows, unemployment is expected to rise.
Wages -
* Wages continue to grow in response to the tight labor market and higher inflation.
* Aggregate wages growth remains consistent with the inflation target, with a lower risk of a prices-wages spiral.
* The Board remains vigilant about the risk of such a spiral, given limited spare capacity in the economy and historically low unemployment rates.
Inflation -
* Global inflation remains high, although it is moderating in headline terms.
* Services price inflation remains elevated in many economies.
* In Australia, inflation has likely peaked, and goods price inflation is expected to moderate due to global developments and softer domestic demand.
* Rent prices are increasing rapidly, with low vacancy rates in many areas.
* The central forecast expects inflation to decline to around 3% by mid-2025, while medium-term inflation expectations remain stable.
Housing -
* Household budgets are under pressure due to higher interest rates, the cost of living, and the decline in housing prices.
* Uncertainty exists regarding the timing and extent of the slowdown in household spending.
* Different households experience varying financial situations, with some having substantial savings buffers and others facing budget constraints.
Economic Outlook -
* Australian GDP growth has slowed, with a 0.5% increase in the December quarter and an annual growth rate of 2.7%.
* The outlook for the next few years expects growth to be below trend.
* Household consumption growth has slowed, influenced by tighter financial conditions, while the business investment outlook remains positive.
Other -
* The Board's priority is to return inflation to the 2-3% target range while maintaining a stable economy.
* Further tightening of monetary policy is expected to bring inflation back to target and address the temporary period of high inflation.
* The Board will closely monitor global economic developments, household spending trends, inflation outlook, and the labor market when determining future interest rate adjustments.
Cash rate -
* The Board has decided to keep the cash rate target unchanged at 3.60 per cent.
* This decision allows for further assessment of the impact of previous interest rate increases and the economic outlook.
Employment -
*The labor market remains tight, with the unemployment rate near a 50-year low.
* Some firms report easing labor shortages, but unemployment is expected to increase as economic growth slows.
Wages -
* Wages continue to rise in response to the tight labor market and higher inflation.
* Wages growth remains consistent with the inflation target, provided productivity growth improves.
Inflation -
* Global inflation remains high but is moderating, while services price inflation remains elevated in many economies.
* In Australia, inflation is expected to decline, with goods price inflation moderating due to global developments and softer domestic demand. * Rents and utility prices are increasing at a fast pace.
Housing -
* The combination of higher interest rates, cost-of-living pressures, and declining housing prices is leading to a substantial slowdown in household spending.
* While some households have savings buffers, others are experiencing financial strain.
Economic Outlook -
* The global economy is expected to have below-average growth this year and next.
* Recent banking system problems in the US and Switzerland have caused financial market volatility and a reassessment of global interest rate expectations.
* The Australian banking system is strong and well-positioned to provide the necessary credit.
Other -
* The Board's priority is to return inflation to the target range of 2-3 per cent while maintaining economic stability.
Further tightening of monetary policy may be necessary to achieve this goal.
* Uncertainty in the global economy, household spending, and inflation and labor market outlooks are key considerations for future interest rate decisions.
Cash rate -
* The Board decided to increase the cash rate target by 25 basis points to 3.85 per cent.
* This decision was made to address the persistently high inflation in Australia and bring it back within the target range.
Employment -
* The labour market remains tight, with the unemployment rate at a near 50-year low.
* Some easing in labour shortages has been observed, but many firms still struggle to hire workers.
Wages -
* Wages growth has accelerated due to the tight labour market and high inflation.
* At the aggregate level, wages growth remains consistent with the inflation target.
Inflation -
* Inflation in Australia has passed its peak but remains high at 7 per cent.
* The central forecast suggests that it will take a couple of years for inflation to return to the target range.
Housing -
* The combination of higher interest rates, cost-of-living pressures, and a decline in housing prices has led to a substantial slowdown in household spending.
* Some households are experiencing financial strain, while others have substantial savings buffers.
Economic outlook -
* The Australian economy is expected to grow below trend, with GDP forecasted to increase by 1¼ per cent this year.
Uncertainty surrounds the outlook for household consumption, given the various economic factors at play.
Other -
* The Board's priority is to return inflation to the target range, as high inflation can negatively impact the economy.
* The Board will closely monitor global economic developments, inflation trends, household spending, and the labour market.
* Further tightening of monetary policy may be necessary to achieve the inflation target in a reasonable timeframe.
Cash rate -
* The Board increased the cash rate target by 25 basis points to 4.10%.
* The interest rate paid on Exchange Settlement balances was also raised by 25 basis points to 4.00%.
Employment -
* The Australian labor market has eased, although conditions remain tight.
* The unemployment rate increased slightly to 3.7% in April.
* Labor shortages have eased, but job vacancies and advertisements remain high.
Wages -
* Wages growth has accelerated due to the tight labor market and high inflation.
* Public sector wages are expected to further increase.
* Aggregate wages growth aligns with the inflation target, but productivity growth needs improvement.
Inflation -
* Inflation in Australia has peaked at 7%, but it remains too high.
* The Board aims to bring inflation back within the target range.
* Services price inflation remains high, and unit labor costs are rising.
Housing -
* Higher interest rates and cost-of-living pressures are causing a significant slowdown in household spending.
* Housing prices are rising again, impacting household finances.
Economic outlook-
* Australian economic growth has slowed, and the Board aims to achieve a soft landing as inflation returns to the target range.
* Uncertainty remains regarding household consumption and the global economy's below-average growth expectations.
Other-
* High inflation adversely affects people's lives, the economy, savings, family budgets, business planning, and income equality.
* The Board remains committed to curbing inflation and will closely monitor labor costs, price-setting behavior, and global economic developments.
Cash rate -
* The Board has decided to leave the cash rate target unchanged at 4.10%.
* Interest rates have increased by 4 percentage points since last year to establish a more sustainable balance between supply and demand in the economy.
Employment -
* Growth in the Australian economy has slowed, and labor market conditions have eased, although they remain tight.
* Labor shortages have lessened, but job vacancies and advertisements remain high.
* Labor force participation is at a record high, and the unemployment rate remains close to a 50-year low.
Wages -
* Wages growth has picked up in response to the tight labor market and high inflation.
* Aggregate wages growth is consistent with the inflation target, provided that productivity growth improves.
Inflation -
* Inflation in Australia has passed its peak, but it remains high and will persist for some time.
* The Board's priority is to return inflation to the target range of 2-3% within a reasonable timeframe.
* High inflation negatively impacts savings, household budgets, business planning and investment, and income inequality.
Housing -
* Some households are experiencing financial strain due to the combination of higher interest rates and cost-of-living pressures.
* Housing prices are rising again, but there are uncertainties surrounding household consumption and financial pressures.
Economic outlook -
* Uncertainty remains regarding the outlook for household consumption.
* The global economy is expected to grow at a below-average rate in the next couple of years.
* The Board will closely monitor global economic developments, household spending trends, inflation forecasts, and the labor market.
Other -
* Further tightening of monetary policy may be necessary to ensure inflation returns to the target range.
* The decision to hold interest rates steady allows for a thorough assessment of the economy, economic outlook, and associated risks.
* The Board is determined to return inflation to the target and will take necessary actions accordingly.
Cash rate -
* The Board decided to maintain the cash rate target at 4.10 per cent, along with the interest rate on Exchange Settlement balances at 4.00 per cent.
* Interest rates have increased by 4 percentage points since last year, aiming to establish a sustainable balance between supply and demand in the economy.
* Considering the uncertainty surrounding the economic outlook, the Board chose to keep interest rates unchanged, allowing time to assess the impact of previous rate increases.
Employment -
* Despite a slight easing, labor market conditions remain tight, with high job vacancies and advertisements.
* The unemployment rate is expected to gradually rise from 3½ per cent to around 4½ per cent next year.
Wages -
* Labor shortages have reduced, and wages growth has increased due to the tight labor market and high inflation.
* Wages growth at the aggregate level is consistent with the inflation target, provided productivity growth improves.
Inflation -
* Inflation in Australia remains high at 6 per cent, although it has started to decline.
* Goods price inflation has eased, but there is brisk price rise in many services, including elevated rent inflation. * The central forecast projects CPI inflation to continue decreasing, reaching around 3¼ per cent by the end of 2024, and returning to the 2–3 per cent target range in late 2025.
Housing -
* The outlook for household consumption is uncertain due to varied financial situations, including cost-of-living pressures and higher interest rates.
* While some households benefit from rising housing prices and savings buffers, overall consumption growth has slowed.
Economic outlook -
* The Australian economy is experiencing below-trend growth, and this trend is expected to continue for some time.
* Household consumption growth and dwelling investment are weak, leading to a central forecast of around 1¾ per cent GDP growth in 2024 and a little over 2 per cent the following year.
Other -
* The Board's priority is to return inflation to the 2–3 per cent target range within a reasonable timeframe to avoid the negative impact of high inflation.
* The Board will closely monitor global economic developments, household spending trends, inflation, and the labor market to make future decisions.
* Some further tightening of monetary policy might be necessary to achieve the inflation target, depending on data and risk assessment.
Stay tuned. (Next announcement is on Tuesday 05 September 2023)
The RBA cash rate is the benchmark interest rate for the Australian economy. It is the rate at which financial institutions lend and borrow money from each other in the overnight money market, and it is used as a reference point for setting other interest rates in the economy. Read more about the RBA cash rate here.
The RBA cash rate is announced on the first Tuesday of every month, except in January, The announcement is typically made at 2:30 PM Sydney time,
On a monthly basis, the Reserve Bank of Australia (RBA) convenes to assess the cash rate and determine if any adjustments are required. These meetings are scheduled ahead of time, with the precise dates and times announced in advance. Following each meeting, the RBA promptly discloses its decisions to the public.
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