RBA to hold rates on September 30 but cut likely after Q3 inflation: Reuters poll

Core Viewpoint - The Reserve Bank of Australia (RBA) is expected to maintain its cash rate at 3.60% as the labor market remains tight and inflation shows signs of persistence [1][3]. Economic Indicators - Australia's monthly consumer price index (CPI) increased by 3.0% in August compared to the previous year, up from 2.8% in July, indicating rising inflation [2]. - Economic growth rebounded in the second quarter, and the unemployment rate has remained relatively stable, suggesting that the RBA can afford to slow its rate cuts [2][3]. Market Expectations - A consensus among economists indicates that the RBA will hold the cash rate at 3.60% during the upcoming policy meeting, with a year-end forecast of 3.35% [1][4]. - Over 80% of economists expect a 25 basis point cut to 3.35% by the end of 2025, while some predict no change, reflecting a shift in sentiment from previous polls [4]. Future Projections - Economists are divided on the likelihood of a rate cut in November, with some suggesting that strong labor market data and inflation could delay any cuts [5][6]. - Long-term forecasts show that 23 out of 38 economists anticipate one more rate cut in the first quarter of 2026, bringing the rate down to 3.10% [5].