The Reserve Bank of Australia reported that Q3 2025 inflation came in higher than anticipated, though policymakers noted that part of the rise in underlying prices was likely temporary. Even so, the minutes highlighted emerging signs of more persistent inflation, possibly due to less spare capacity than previously expected. The labour market was described as slightly tight, with unemployment projected to remain largely unchanged. Although financial conditions eased following 75 basis points of cuts earlier in the year, the board judged that policy remained somewhat restrictive. With economic signals still uneven, members agreed there was no immediate reason to alter the cash rate. The minutes said holding steady made sense in situations where demand stays firm, supply capacity is limited, or the stance is no longer restrictive. However, if labour momentum weakens or growth disappoints, additional easing could be considered. Overall, the RBA emphasised a patient, data-driven approach amid continued uncertainty.
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