Markets Expect More RBA Rate Cuts Amid Slowing Inflation

Australian inflation has slowed, bringing both headline and core rates back within the Reserve Bank of Australia's (RBA) target band for the first time in four years, strengthening the case for further interest rate cuts. Recent quarterly data shows consumer prices rising modestly, with the annual pace of inflation dropping to 2.9%, down from 3.3%. Market expectations for more RBA rate cuts remain strong, with both officials and analysts noting that the latest figures do not challenge the outlook for additional easing. Treasurer Jim Chalmers emphasized that nothing in the new data would change these market expectations, and he is keen for the public to anticipate and credit the government for potential rate relief. Analysts note that the broad disinflation trend persists, suggesting the Australian economy is well-placed to handle further rate reductions. The overall sentiment is that the RBA is poised for more cuts, barring unforeseen shifts in economic conditions.