Australia’s second-quarter inflation data aligned with central bank expectations, providing a positive signal for monetary policy while keeping interest rate decisions cautious, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said Thursday. Speaking at the Barrenjoey Economic Forum in Sydney, Hauser described the data as “very welcome” but emphasized the board’s measured approach to policy adjustments.
Consumer prices in the June quarter rose at the slowest pace in over four years, with core inflation hitting a three-year low. This outcome strengthened market bets on an interest rate cut in August, with traders pricing a 95% probability of a quarter-point reduction. The RBA surprised markets earlier this month by holding rates steady at 3.85%, awaiting more evidence of sustained inflation moderation.
Despite the softer inflation figures, Hauser highlighted continued labor market resilience, noting unemployment remains low at 4.3%, close to full employment levels. He added that while a sharp rise in joblessness could prompt a policy response, this is not the central bank’s baseline scenario.
Hauser also addressed the RBA’s recent unpredictability in policy moves, assuring that surprises will remain occasional rather than the norm. “There will be shocks from time to time,” he said. “You will see a sequence of us doing the right thing but not necessarily the predictable thing.”
The latest data and commentary have fueled expectations of imminent monetary easing, potentially marking a shift in Australia’s rate cycle amid global central banks pivoting toward looser policy. Markets now closely watch the August 12 meeting for confirmation of the anticipated cut.


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