RBA RAISES CASH RATE TO 4.85% AS TRIMMED MEAN INFLATION FORECASTS RISE
The Reserve Bank of Australia (RBA) raised its cash rate target by 25 basis points, from 4.60% to 4.85% at its November meeting, according to ActionForex. Six Board members supported the increase, while three preferred to leave rates unchanged.
The accompanying statement included upward revisions to trimmed mean inflation forecasts. According to ActionForex, the RBA raised its December 2026 trimmed mean inflation forecast from 3.3% to 3.6%, while the projection for June 2027 increased from 3.0% to 3.5%.
The updated projections also show trimmed mean inflation reaching 2.9% by December 2027, compared with the previous forecast of 2.6%. The RBA warned of “an increasing risk that higher inflation expectations will become embedded.”
At the same time, the central bank revised its economic outlook to lower. According to ActionForex, the December 2027 GDP growth forecast was reduced from 1.6% to 1.3%, while the unemployment projection for the same period increased from 4.7% to 4.9%. The unemployment rate is now expected to reach 5.1% by December 2028.
According to ActionForex, the outlook is data-dependent, with no predetermined path. The statement no longer explicitly refers to further rate increases if needed, instead stating that the Board “will continue to do what it considers necessary to bring inflation sustainably back to target.”
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