RBA Recap

• While global central banks pivot to rate cuts, the RBA is holding steady, diverging sharply from international peers.
• Despite falling from its peak, core inflation remains a major concern, with a return to target projected only by 2026.
• Strong employment is stabilising inflationary pressures, but will cracks in the labour market finally give the RBA room to ease?

The Australian Economy

• The Labour market continues to remain resilient. Despite high employment rates, economic growth remains weak and serves as an interesting contradiction within Australia’s economy.
• Q3 inflation data reflects persistent pressures in services inflation, even as headline figures were softened by electricity rebates. This stubborn inflation has shifted rate-cut expectations further out, with the first anticipated cut now likely beyond mid-2025.

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