RBA Minutes Flag Data-Dependent Path for Rate Cuts

The pace of cash rate cuts in Australia should be guided by incoming data on a meeting-by-meeting basis, minutes from the Reserve Bank of Australia’s August meeting showed. The board on August 12 unanimously lowered the cash rate by 25bps, the third reduction this year, bringing borrowing costs to their lowest since April 2023. Policymakers noted inflation had eased back into the 2–3% target range, as the labour market was softening and output growth remained subdued. Members highlighted reasons for a gradual pace of easing, including still-tight labour conditions, inflation projected slightly above the midpoint of the target range, and signs of recovering private demand. At the same time, they acknowledged circumstances that could warrant faster cuts, such as a balanced labour market or downside risks from the global economy. Given uncertainties over spare capacity and the neutral rate, officials agreed to remain data-dependent while focusing on price stability and full employment.