18 Jun 2024
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The Reserve Bank of Australia (RBA) Board has decided to leave the cash rate unchanged at 4.35% at its June meeting.
June 2024 - Article provided by PSK's Chief Investment Officer Chris Lioutas.
The Reserve Bank of Australia (RBA) Board has decided to leave the cash rate unchanged at 4.35% at its June meeting.
Minutes released after the May meeting seemed to indicate the hurdle for the RBA to raise rates from current levels is quite high, implying they continue to prefer patience in letting higher rates work their way through the economy in order to bring inflation into their target band.
There were little changes from the May statement. The two notables were clear and impactful –
- Productivity growth needs to pick up in a sustained way if inflation is to continue to decline
- The Board remains resolute in its determination to return inflation to target and “will do what is necessary to achieve that outcome”
This is somewhat stiffer wording than we’ve previously seen from the RBA, noting we previously flagged they had erred in not being more hawkish when it comes to their inflation fight. It remains to be seen whether it’s stiff enough, especially considering their insinuation the bar to raise rates from here is high.
Following their announcement, Australian equities are largely unmoved, the AUD/USD rose slightly, and Australian bond prices fell (yields higher). Effectively, little change given the statements from May to June.
As always, if you have any questions or your personal circumstances have changed please do not hesitate to contact your financial adviser
General Advice Warning - Any advice included in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation or needs.
