A subtle shift in the RBA’s rhetoric

The Reserve Bank of Australia (RBA) was always going to leave interest rates at 1.5% today, but there are some subtle signs that the Bank is becoming more concerned about the outlook for the labour market and underlying inflation, but less concerned about the housing market. We think that shift has further to go and that it will prompt the RBA to cut interest rates to 1.0% by the end of the year.

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