RBA Recap

• The RBA left the cash rate unchanged at 4.35% in December, signalling a dovish shift in tone as it grows more confident in easing inflation while acknowledging economic softening and risks to growth.
• Despite progress in reducing inflationary pressures, challenges like weak household consumption, slowing GDP growth, and rising unemployment highlight the delicate balance the RBA must maintain between inflation control and employment stability.
• The Board’s cautious approach reflects a focus on long-term inflation targets, with market expectations leaning toward rate cuts in 2025 as the RBA monitors evolving economic conditions and global monetary policy trends.

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