As expected, the Reserve Bank of Australia has opted to hold the cash rate at 4.35%.

The US Fed Reserve’s recent decision to lower rates by 50bps was seen by some as “added pressure” for the RBA to consider cutting rates, however, the RBA remains utterly committed to reducing inflation, which is still above target.

While economic growth has been weakening, labour productivity is still at only 2016 levels and wage pressures have only come off marginally in recent months - the unemployment rate is still only 4.2%.

In short, the latest economic data hasn’t effectively changed the RBA’s current stance - getting inflation under control remains its top priority.

Rick Maggi, Financial Advisor