At its November meeting, the Reserve Bank of Australia (RBA) decided to keep the cash rate steady at 3.60%, a move that was widely expected but one that reflects ongoing caution in the face of persistent inflation.

What Happened?

The RBA board unanimously agreed to hold rates after inflation data for the September quarter came in “materially higher than expected.”

  • Headline inflation: 3.2%
  • Trimmed mean (RBA’s preferred measure): 3.0% — above the 2–3% target band

Inflation has fallen substantially since its 2022 peak, but recent data show price pressures have picked up again.

Why hold rates?

The RBA emphasised the need for patience and caution:

“The recent data on inflation suggest that some inflationary pressure may remain in the economy… Financial conditions have eased since the beginning of the year, but it will take some time to see the full effects of earlier cash rate reductions.”

In short, the RBA wants clear, sustained evidence that inflation is returning to the midpoint of its target before cutting rates. Acting too soon could risk undoing progress made so far.

What’s next?

  • Future rate cuts: Economists now expect no further cuts before 2026, and some warn another increase is still possible if inflation remains stubborn.
  • Global context: Central banks in the US and UK are taking a similar cautious approach.
  • Domestic outlook: Private demand is recovering, housing prices are rising again, and credit remains readily available; however, growth, employment, and productivity all carry some uncertainty.

Market concerns

Persistent inflation in housing, insurance, and healthcare means the RBA is balancing carefully between supporting growth and keeping prices under control. Global energy prices and geopolitical risks could also weigh on future decisions.

Key takeaway

With inflation still above target and the economy showing mixed signals, the RBA is holding steady, keeping the focus on price stability and full employment.

Source: RBA November Statement on Monetary Policy and The Conversation.

If you would like to understand what these changes mean for your financial strategy, get in touch with the team at Benjamin King Money Wealth.

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