RBA Holds Cash Rate Steady at 4.35%

In its latest meeting, the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at 4.35%. Homeowners and investors alike had been anxiously awaiting the announcement, especially following the recent release of inflation figures.

The Australian Bureau of Statistics reported a 1% increase in the consumer price index (CPI) for the second quarter of 2024, pushing the annual headline inflation rate to 3.8%. While this marks a slight increase from the previous quarter's 3.6%, a crucial indicator of underlying inflation, the trimmed mean, has declined for the sixth consecutive quarter. This trend suggests that inflation is gradually easing.

The RBA aims to bring inflation within its target range of 2-3% by the second half of 2025. Economists have mixed opinions on the timing of the next cash rate adjustment. Some predict a potential rate cut as early as November, while others believe it will occur next year.

|Treasurer Jim Chalmers noted that the inflation figures align with the RBA's forecasts and emphasized that underlying inflation continues to moderate. "Inflation is still sticky and stubborn across our economy, and more persistent than we would like, but the June quarter is the sixth consecutive quarter of lower annual trimmed mean inflation in Australia," he said.

For homeowners, now is an excellent time to review your mortgage. We can help you compare different loan options and potentially find a more competitive interest rate. Additionally, we can explore features like offset accounts or redraw facilities that could save you money over the life of your loan.

To explore your options and ensure you're getting the best deal on your mortgage, get in touch with your broker.