Minutes from the RBA’s July 7–8 meeting reveal a Board broadly aligned on the view that there will be “some additional reduction in interest rates over time”. Yet, the board is divided on the “appropriate timing and extent of further easing”. The majority ultimately judged it prudent to keep the cash rate steady at 3.85%.
The decision to hold reflected stronger-than-expected recent data, including “a little stronger than expected” private demand in Q1 and resilient labor market that ” has not eased as anticipated”. Monthly inflation readings had also been “marginally higher” than staff projections. Additionally, Members noted that reduced global risks allowed greater confidence in the RBA’s baseline forecasts, rather than the worst-case scenario.
Still, the minutes make clear that the RBA remains on an easing path. Some members argued there was already enough evidence to justify a cut now, but the Board as a whole leaned toward keeping a cautious, gradual approach, which is inconsistent with a third rate cut within the space of four meetings at that time.
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