After years of rising interest rates, Australians are finally seeing inflation drop into the RBA’s target range. You’d think that means a rate cut is around the corner, right? Well, not quite.
Despite the recent annual inflation rate falling to 2.8%, the Reserve Bank of Australia is unlikely to cut rates just yet. Why? The RBA’s preferred measure, called “trimmed mean inflation,” is still sitting at 3.5%—above the RBA’s comfort zone. This measure smooths out temporary price shifts, like electricity rebates and fluctuating fuel prices, which can give a skewed view of inflation.
So, when can we expect relief? The “big four” banks predict the first rate cut could happen in February 2025, with a few more cuts potentially by the end of the year. But for now, 2024 rate cut hopes are off the table.
💬 What do you think? Have you been feeling the impact of rising rates?
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Why You’ll Probably Have to Wait Until 2025 for Good News on Interest Rates