Interest rates

Interest rates
RBA holds rates at 3.6%; inflation, growth risks linger
The Reserve Bank of Australia (RBA) has left the cash rate unchanged at 3.6%, in line with market expectations, as policymakers weighed a mix of rising domestic demand, sticky inflation, and heightened global uncertainty. At its September meeting, the central bank said inflation had eased considerably but warned it may still surprise on the upside. "Both headline and trimmed mean inflation were within the 2–3 per cent range in the June quarter. Recent data, while partial and volatile, suggest that inflation in the September quarter may be higher than expected at the time of the August Statement on Monetary Policy," the minutes stated. The decision came after fresh consumer price figures showed headline inflation accelerating to 3% in August, its highest level since July 2024, driven by housing, food, and alcohol costs. Policymakers also pointed to stronger private demand as a key driver of economic momentum: "Data for the June quarter show that private demand is recovering a little more rapidly than expected, taking over from public demand as the driver of growth. In particular, private consumption is picking up as real household incomes rise and measures of financial conditions ease. "The housing market is strength
Interest rates
US Fed cuts interest rates, sees more to come
The United States Federal Reserve (Fed) has cut interest rates by 25 basis points and flagged a further easing of borrowing costs for the rest of this year. In a widely expected decision, the United States central bank reduced the target range for its benchmark lending rate to between 4% and 4.25% as it responded to a weak American jobs market. The decision was supported by all members of the Fed, including all of President Donald Trump's appointees, except the newest member, Stephen Miran, who argued in favour of a 50 basis point reduction. The other 11 voting members of the Federal Open Market Committee (FOMC), which sets rates in the world’s largest economy, supported the quarter-point cut to the Fed funds rate. The Fed Board said economic growth had moderated in the first half of the year, jobs gains had slowed, unemployment had edged up but remained low, and inflation had moved up and remained somewhat elevated. “Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen,” it said in a press release. Projections showed officials expected two more 25 basis point reductions at the rem
Interest rates
Trump Fed control a 'serious danger', says Lagarde
European Central Bank President Christine Lagarde has warned that President Donald Trump's attempts to undermine Federal Reserve independence would pose a "very serious danger" to the global economy. Speaking to France's Radio Classique on Monday, Lagarde said White House control over U.S. monetary policy would have "very worrying" consequences for economic stability worldwide. "If U.S. monetary policy were no longer independent and instead dependent on the dictates of this or that person, then I believe that the effect on the balance of the American economy could, as a result of the effects this would have around the world, be very worrying, because it is the largest economy in the world," Lagarde said. Last month, Trump attempted to fire Fed Governor Lisa Cook over mortgage fraud allegations. Cook has since filed a federal lawsuit challenging the removal, arguing that Trump lacks legal authority and that the accusations are unsubstantiated. The Fed maintains its current target range of 4.25% to 4.5% due to inflation concerns, particularly around tariff impacts, yet Trump has repeatedly insisted the interest rate cuts to below 1%. Lagarde said it would be "difficult" for Trump to gain control of the Fed's majori
Interest rates
Fed’s Waller backs September cut, sees easing ahead
Federal Reserve Governor Christopher Waller on Thursday strengthened his call for interest rate cuts, signalling that the United States central bank should begin easing next month and continue through early 2026 to shield the economy from a weakening labour market. “Based on what I know today, I would support a 25 basis point cut at the Committee's meeting on September 16 and 17,” Waller told the Economic Club of Miami. "While there are signs of a weakening labor market, I worry that conditions could deteriorate further and quite rapidly, and I think it is important that the FOMC not wait until such a deterioration is under way and risk falling behind the curve in setting appropriate monetary policy." By his estimates, a neutral policy rate would sit near 3%, well below the current 4.25%-4.50% range. "The time has come to ease monetary policy and move it to a more neutral stance", Waller said, adding he anticipates "additional cuts over the next three to six months, and the pace of rate cuts will be driven by the incoming data". He stressed that while September’s cut should be limited to 25 basis points, that outlook could shift depending on the Labour Department’s August jobs report due next week. Inflation, he
Interest rates
RBA believed more rate cuts were needed - Minutes
The Reserve Bank of Australia (RBA) believed interest rates needed to be further reduced in the coming year to preserve full employment and reduce inflation to the midpoint of its target range. But it was not clear to Members of the RBA’s Monetary Policy Board if the official cash rate should be lowered at a gradual or faster pace, according to the Minutes of the last Board meeting published on Tuesday. The RBA announced a 25 basis point cut in the cash rate to 3.60% after the meeting of the Board held on 11 and 12 August. “Members agreed that – based on what they knew at the time of the meeting – preserving full employment while bringing inflation sustainably back to the midpoint of the target range appeared likely to require some further reduction in the cash rate over the coming year,” the Minutes read. RBA staff were forecasting that the Board would achieve its inflation and full employment objectives over the medium term if the cash rate was reduced at the August meeting, “and somewhat further thereafter”. A tight labour market, a forecast for inflation to be marginally above the target range midpoint in the medium term and recovering private demand were among the conditions that warranted a gradual pace of red

Interest rates
Markets cheer as Powell hints at interest rate cut
United States Federal Reserve Chair Jerome Powell buoyed financial markets by providing a strong indication that interest rates may be cut next month. In a speech on Friday (Saturday AEST), Powell opened the door to the central bank’s first rate cut of President Donald Trump’s second term, but he was also careful to address the risks of easing monetary policy. The U.S. stock market rose while U.S. bond yields and the U.S. dollar fell in the wake of his closely-watched address to the Fed’s annual symposium. "The stability of the unemployment rate and other labour market measures allows us to proceed carefully as we consider changes to our policy stance," Powell said in his speech titled Monetary Policy and the Fed’s Framework Review. "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance." He was speaking at the Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy economic symposium sponsored by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming. Powell said the labour market appeared to be in a “curious kind of balance” resulting from a marked slowing in the supply of and demand f
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CPI data fuels Fed rate cut bets as markets rally
United States inflation data for July delivered a mixed but largely reassuring picture that has reinforced expectations for a Federal Reserve interest rate cut next month with markets rallying on signs that tariff pressures may be less severe than feared. The Consumer Price Index rose 2.7% year-on-year in July, matching June's reading and coming in below the 2.8% consensus forecast. On a monthly basis, headline CPI increased a modest 0.2%, aligning with expectations and marking a deceleration from June's 0.3% pace. However, core CPI excluding food and energy accelerated to 3.1% annually, up from 2.9% in June and exceeding the 3.0% forecast. This marked the highest core inflation reading since February and the first time in six months that the metric failed to undershoot estimates.Fed policy implications take centre stageThe inflation data arrives at a critical juncture for Federal Reserve policymakers, who held rates steady at their July meeting amid concerns about persistent price pressures and tariff uncertainty. The central bank has maintained its target federal funds rate in the 4.25%-4.50% range throughout 2025. "CPI was in line with expectations but the trend is heading in the wrong direction," said Schwab
Interest rates
Data to determine if RBA cuts rates again - Bullock
The Reserve Bank of Australia (RBA) will weigh up forthcoming economic information to determine if it needs to keep cutting the official cash interest rate, Governor Michele Bullock said. Asked about the economic conditions, the RBA needed to lower rates further, Bullock said the bank assessed backward-looking data, including inflation and unemployment, along with data from surveys and its business liaison program and its own forecasts. She said the RBA’s Monetary Policy Board had three more meetings before the end of the 2025 calendar year and over that period would see more inflation, unemployment and economic growth figures and receive more liaison data. “We weigh that all up and we look at whether or not we think it's confirming where we thought we were and where we're going or it doesn't, and if it doesn't confirm the direction that we're heading, then we'll have to think about what we're going to do with interest rates,” Bullock told a news conference. In a unanimous decision that was welcomed by Treasurer Jim Chalmers, the Board decided to cut rates for the third time this calendar year by 25 basis points to 3.60%, the lowest level in two years, and sounded a note of caution about the outlook. Bullock also de
Interest rates
Chalmers welcomes rate cut but more work needed
Australian interest rates have fallen to their lowest level in more than two years but “the job is not finished”, Treasurer Jim Chalmers said. He was speaking after the Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points to 3.60%, as widely expected. “This is very welcome relief for millions of Australians,” Chalmers said in a statement. Chalmers said this was the first time in almost two decades that rates been cut three times in a calendar year at the same time as the unemployment rate was below 5%. “The three interest rate cuts we’ve seen this year would not have been possible without our collective efforts to get inflation down,” he said. “Headline and underlying inflation have fallen to their lowest rates in almost four years, and are now both in the RBA’s target band." The RBA’s statement made it clear inflation had fallen substantially since its peak in 2022 and was expected to “continue to moderate”. Chalmers said inflation was falling, unemployment was low, real wages and living standards were growing again with more than 1.1 million jobs created, debt was down, the economy was growing and interest rates were falling. “Today’s cut doesn’t mean the job is finished, but it w