The central bank is set to meet next week, but is widely expected to keep rates unchanged at 4.35% after core consumer price index inflation read mildly cooler than expected for the June quarter.
The second-quarter trimmed mean CPI data was in line with the RBA’s forecast, and a fall in non-tradables and services inflation presented a greater chance that the central bank will keep rates steady, Benjamin Picton, Senior Strategist at Rabobank said in a social media post.
Services inflation in particular was a key point of concern for the RBA, with the central bank having signaled earlier that services still presented upside risks for price pressures.
While the second-quarter CPI reading did show an uptick in some inflation- particularly from imports and steady consumer spending, it was unlikely that the RBA will have enough impetus to hike rates further.
Still, the central bank is also unlikely to cut interest rates anytime soon, considering that inflation still remains comfortably above the RBA’s 2% to 3% annual target.
Rabobank only expects the RBA to begin cutting rates from the second quarter of 2025.
Source: Economy - investing.com
