The Reserve Bank of Australia has lowered the cash rate by 25 basis points to 3.60 per cent, its third cut this year, citing further progress on inflation and signs of easing in the labour market.
The decision came after the June-quarter CPI showed underlying inflation at 2.7 per cent and headline inflation at 2.1 per cent, both inside the Bank’s 2–3 per cent target band.
Tuesday’s move follows earlier reductions in February and May that brought the rate to 3.85 per cent, and adds to a gradual easing path the Bank says is consistent with returning inflation to the midpoint of the target while supporting employment.
Governor Michele Bullock previously noted that disinflation had broadened and that the transmission of earlier cuts was still working through the economy.
The Bank’s statement pointed to a mixed outlook: global uncertainty remains elevated amid trade policy shifts, while at home, there are signs private demand is stabilising as real household incomes edge higher. It also flagged that wage growth has eased from its peak, productivity remains weak, and the timing and size of policy lags are hard to pin down—reasons for the Board to proceed cautiously even as underlying inflation drifts toward the midpoint of the band.
Labour market conditions have loosened a touch. Unemployment rose to 4.3 per cent in June, in line with a gradual cooling flagged by business surveys and consistent with the RBA’s softer growth outlook released alongside today’s decision.
For borrowers, major lenders are expected to pass through today’s cut in coming weeks, trimming mortgage repayments further; for savers, returns on deposits are likely to ease. Markets are pricing some additional easing into 2026, but the RBA says it will remain data-dependent and stands ready to adjust if global developments materially change the outlook.
Key numbers: cash rate 3.60%; trimmed-mean inflation 2.7% y/y; headline inflation 2.1% y/y; unemployment 4.3%.
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