Reserve Bank to lay out reasons for not cutting rates
Mortgage holders can expect to hear some more information about why Australia’s central bank has chosen to keep interest rates steady
The Central Bank will on Tuesday release the minutes of its last meeting in September, when the official cash rate was held at 3.6 percent.
Governor Michele Bullock did not say whether the Federal Reserve would consider further rate cuts in 2025, following three rate cuts at the beginning of the year.
While economists hinted that the cash interest rate could be further eased towards the end of the year, stubborn inflation prevented further easing of mortgage loans.
The latest monthly inflation data shows it is 2.8 percent, in the upper bands of the Central Bank’s 2 to 3 percent target range.
Ms Bullock told a Senate hearing on Friday that inflation forecasts remained “sticky”, particularly in areas such as the services sector.
“This is offset somewhat by lower goods inflation, but services inflation is still around three percent,” he said.
But he said the unemployment figure in Australia was at a good rate.
The comments come ahead of new workforce figures for September due to be released on Thursday.
The national unemployment rate remained steady at 4.2 per cent in August, although employment fell by 5000 people during the month, according to Australian Bureau of Statistics data.
Economists predicted the unemployment rate would remain steady at 4.2 percent in September.
The Commonwealth Bank predicts 30,000 jobs will be added to the economy this month, taking the participation rate to 66.9 per cent.
NAB senior market economist Taylor Nugent said unemployment data was a coin toss between 4.2 per cent and 4.3 per cent for September, but the figure was unlikely to influence the Reserve Bank on interest rates.
“Given our expectation of a material inflation surprise, it is unlikely the data will be soft enough to keep the November meeting (for a rate cut) alive,” he said.
The RBA governor is expected to give more information about the state of the economy in his speech to the Nomura Research Forum in Washington on Thursday.
Meanwhile, months of calm on Wall Street were disrupted Friday as U.S. stocks fell after President Donald Trump threatened to increase tariffs on China.
The S&P 500 lost 2.7 percent on its worst day since April, while the Dow Jones Industrial Average fell 878 points (1.9 percent) and the Nasdaq composite fell 3.6 percent.
Australian stock futures lost 84 points, or 0.93 percent, to 15,618.
The benchmark S&P/ASX200 index fell 11.5 points on Friday, falling 0.13 percent to 8,958.3 points, while the broader All Ordinaries lost 12.3 points, or 0.13 percent, to 9,264.3 points.
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