The Reserve Bank of Australia is meeting today and tomorrow, Monday, August 11, 2025 and Tuesday, August 12, 2025.
After last month’s shock decision to hold the cash rate steady in the face of a near unanimous expectation for a rate cut (Deutsche Bank and Alicia Garcia Herrero, chief Asia Pacific economist at Natixis, were notable exceptions., calling for a hold) expectations are unanimous for a cut tomorrow.
The RBA will announce its decision at 2.30pm local time on Tuesday, August 12, 2025:
- 0430 GMT, 0030 US Eastern time
Westpac expects a cut tomorrow, and more to come:
- cuts to a terminal rate to 2.85% by June 2026
- “If inflation is at target and you are roughly at full employment, then monetary policy does not need to be restrictive, as it currently is
- While the RBA is trying to be ‘cautious and predictable,’ that is consistent with cuts to the cash rate on the timetable we envisage.”
Commonwealth Bank of Australia:
- expect 25bp interest rate cut to 3.60%
- a straightforward decision
- It has been just five weeks since the shock on hold July meeting and the data flow has largely evolved as expected
- disinflation impulse in the Australian economy continued in the June quarter
- June labour force release … was a soft report, and the average unemployment rate came in line with the RBA’s forecasts from May at 4.2% in Q2
- If the data evolves as expected a follow up rate cut should be delivered in November.
While I expect a cut (like I did in July …. d’oh!) I also expect RBA commentary, including Reserve Bank of Australia Governor Bullock’s comments at her follow-up press conference an hour after the Statement, to be on the hawkish (or at least, less dovish) side. The RBA will want to maintain options going forward and will not to fuel the fire of further rate cut expectations too much
