The Reserve Bank of Australia have decided to hold the official cash rate at 4.35% during its monetary policy meeting for August. Today’s decision marks the 6th consecutive cash rate hold since November 2023.
Economists had speculated whether the RBA would lower rates in response to recent market downturns. The Reserve Bank of Australia have adjusted its expectations, now anticipating a more gradual return of underlying inflation to the target of 2.5%, a pace slower than previously forecasted in May.
RBA Governor Michele Bullock was asked in the Media Conference today how seriously the board considered a potential rate hike, “It was a very serious consideration. There were only two things on the table – hold (the rates), accepting that we might have to hold for some time, or raise.” she said. “And I think the board felt that the risks associated with raising at this point, as opposed to holding where we are and just staying where we are, warranted the second alternative, which is what we did.”
Despite this, Treasurer Jim Chalmers expressed optimism, stating, “We are confident we can continue to see inflation moderate, we’re confident that we can continue to grow.”
Despite the relief of the rates not rising this round, borrowers may still be feeling the pinch of a high interest environment.
If you’re interested in a portfolio review, reach out to the team at CapStack today.
The CapStack team can help you evaluate how this extended period of stability can benefit your investment strategy. This consistency in rates may present an opportunity to refinance existing loans, potentially reducing costs and enhancing cash flow. CapStack's brokers can provide expert insights into market trends and lending conditions, ensuring that your financial decisions align with the current economic climate and your long-term objectives.
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