The RBA kept interest rates unchanged at 4.75%

The RBA kept its cash rate unchanged at 4.75% today, in line with  my expectations. Despite recent  talk from the RBA, the statement is more neutral in tone.  With little data out in the next few weeks, it will be difficult for the RBA to sufficiently change their view and tighten policy at the July meeting.

That said, given the RBA’s strong inflation forecasts, a rate rise in Q3 remains a strong possibility, particularly if Q2 core inflation (due late July) prints in line with RBA forecasts.


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