Why the RBA opted for smaller rate cut

Why the RBA opted for smaller rate cut

Struggling households would have benefited from an ‘insurance against global trade risk’ outsized 50 basis point rate cut if it weren’t for one thing.

RBA minutes confirm May rate cut driven by caution amid global trade turmoil

Central bank weighed 50bp move but opted for steady path; signals flexibility if global conditions worsen   The Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 3.85% at its 20 May meeting, citing weakening household consumption, easing inflation, and growing uncertainty over global trade policy. Minutes released on Tuesday show the board also considered a larger 50bp cut, but ultimately preferred a “cautious and predictab…

RBA Minutes: Not yet time to move monetary policy to an expansionary setting

The Reserve Bank of Australia (RBA) released the Minutes of its May financial policy conference on Tuesday, highlighting that the board chose the case for a 25 basis points (bps) cut was a more powerful one and chosen policy to be careful and foreseeable. Extra takeaways The board thought about keeping rates the same, cutting by 25 bps or 50 bps. Chose case for a 25 bps cut was a more powerful one, chosen policy to be careful and foreseeable. I…