Reserve Bank of Australia decided to hold cash rates at 4.10% for three consecutive months.
In the September Monetary Policy meeting, the Reserve Bank of Australia maintained the cash rates at 4.10%. This marks the third consecutive month the cash rate has remained at this level.
In the media statement for the September Monetary Policy Decision, Governor Philip Lowe reported the following;
“The Australian economy is experiencing a period of below-trend growth and this is expected to continue for a while. High inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment. Notwithstanding this, conditions in the labour market remain tight, although they have eased a little. Given that the economy and employment are forecast to grow below trend, the unemployment rate is expected to rise gradually to around 4½ per cent late next year. Wages growth has picked up over the past year but is still consistent with the inflation target, provided that productivity growth picks up.”
Statement by Philip Lowe, Governor: Monetary Policy Decision
Governor Philip Lowe went on to say;
“The recent data are consistent with inflation returning to the 2–3 per cent target range over the forecast horizon and with output and employment continuing to grow. Inflation is coming down, the labour market remains strong and the economy is operating at a high level of capacity utilisation, although growth has slowed.”
However, as the RBA prudently states in the final paragraph of their media statement.
“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.
As we contemplate the future trajectory of the Cash Rate, one question has lingered in all mortgage holders’ minds. Have we already witnessed the peak of the interest rate cycle?
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