..as widely expected. RBA cuts rates 0.25pc to 3.85pc
Sarah Jones
The number: The Reserve Bank of Australia cut the official cash rate for the second time this year by 25 basis points to 3.85 per cent as widely expected by the financial market and economists.
Why it matters: The central bank reduced the cash rate in February in what was a line-ball decision after the pace of inflation slowed sufficiently to warrant the first easing in nearly five years. But after holding fire in April, global uncertainty caused by US tariffs has raised concerns about the global outlook and the path of inflation.
What has changed: Domestic inflation finally returned to the RBA’s 2 per cent to 3 per cent target band in the first quarter, but the job markets, a key driver of inflation, remains tight. The US Federal Reserve left the policy on hold after its most recent meeting.
What’s next: RBA governor Michele Bullock will hold a media conference at 3.30pm which is expected to provide more insights into the board’s decision-making.
