RBA LIVE: Interest rate announcement

Welcome to your live coverage of May RBA announcement. We will provide you with the latest information on announcements from our economists and expert comments.

Thank you for joining us

4:35 pm

This summarizes our decision on the 2025 cash rate decision on the Third Reserve Bank board.

Thank you for following our coverage of the 0.25% cut rate cut today and keep an eye out for the response scope of tomorrow’s decision.

A “universal” concern for productivity growth

4:29 pm

Governor Michele Bullock said Australia is not alone in driving productivity risks.

“There is a lot of uncertainty about productivity,” she said.

“I can’t tell you what to reverse. Most other countries are in the same position as us.

“I don’t know what the answer is, but productivity is the top spot on the list where the treasurer is working.”

Bullock: RBA is powerless to afford housing

4:14 pm

Gov. Michele Bullock said in a press conference today that housing affordability is a demand and supply problem that the Reserve Bank cannot solve.

“This issue is increasingly entering state and federal governments, and that’s where the focus has to be,” she said.

“It’s been brewing for years, but we have to focus on inflation and employment tasks, which is a good thing for young people and tenants.”

Main domestic risks in the labor market

4:07 pm

Governor Bullock said Australia’s labor market tension is the most important major risk in the domestic economy at present.

“Not everyone agrees with us, but that’s our judgment,” she said.

“This shows that supply has not really returned to balance and therefore there is still inflationary risk.”

Bullock Brushs Productivity Focus

3:59 pm

The governor raised concerns about Australia’s 60-year productivity, which is less than unstable inflation.

“If we want to see wages keep increasing, then if productivity doesn’t increase, the increase in wages does make it harder to go up.”

“This is very important and I’m glad that the Treasurer has identified it as one of the key priorities for the government.”

Recession may be

3:52 pm

Governor Michele Bullock said the Reserve Bank scenario analysis showed that Australia will face a recession in the next two years.

Ms. Brock said in response to media questions:

“This is in very extreme situations. At the moment, we have not taken this into consideration, but we need to be vigilant.”

“New Challenges Facing the Economy”

3:43 pm

Australia’s Australian Storage Governor Michele Bullock started her press conference saying our tariffs have brought “a series of new challenges” to the Australian economy as inflation returns to control.

“Trade policy can lead to supply chain problems, which can raise prices for certain imports, like we’ve seen during the pandemic,” she said.

“We need to be alert to rising risks. The board is still ready to take further action when needed.”

Inflation is expected to remain in the 2-3% target

3:15 pm

According to the RBA statement, inflation risks in the Australian economy “become more balanced”, which is a key factor in determining the possibility of today’s cuts.

“The Board of Directors believes it is appropriate to relax monetary policy at this meeting,” the statement said.

“The rising risk seems to have been reduced.”

RBA is very uncertain about global prospects

2:54 pm

The Reserve Bank has issued a cautious statement on today’s tax cuts, marking “quite uncertainty” around tariffs.

“Geopolitical uncertainty is also still obvious,” the statement said.

“These developments are expected to have a negative impact on global economic activity, especially if households and businesses delay spending more clearly on the outlook.”

Governor Michele Bullock is about to speak

2:46 pm

The conclusion of today’s monetary policy meeting will be Governor Michele Bullock’s usual speech to the media.

The press conference will be held at 3:30 pm and will see Ms. Bullock share the decision-making process of the board and its economic prospects.

Cut cash rate to 3.85%

2:30 pm

The RBA board has confirmed that the cash rate will be largely reduced to 3.85% by the actions expected by markets and economists.

Today’s 0.25% cut means that the cash rate is now 0.5% lower than the 0.5% 12 months ago, the same as in May 2023.

Economists forecast 0.25% cut

1:47 pm

Angus Moore, economics manager at REA Group, said pricing in the market means there is a great opportunity for 25 basic points (BP) this afternoon.

“Given the potential inflation has now returned to the RCMP target band, though only, I would be surprised if the Australian reserves were not intended to be cut,” he said.

“Although market pricing presents some opportunities to cut 50 bp, the possibility is now smaller.”

Tariff pressure concerns

1:32 pm

If a trade war between China and the United States begins, Australia’s economic status could be very easy and hugely damaged.

The temporary pause announced by the U.S. tariffs on China last week are a positive signal of trade tensions, although it remains a temporary measure.

If pressure reappears, Australia’s lower expectations for the year will likely cool down.

Another record high month for housing prices

1:17 pm

House prices in Australia reached another record high in April, although growth rates were slower than the first three months of the year.

As expected, if we see higher tax rates from RBA reductions, we can see again how fast the price is growing.

Currently, the average price of a home in Australia is $805,000.

Latest forecasts for big banks

1:01 pm

NAB predicts the rate of two cuts today, and the rate of cuts in December.

Westpac expects cuts today and in August and November, and ANZ also expects three more cuts this year.

Commonwealth Bank (Australia’s largest lender) predicts a tax rate cut every quarter in 2025.

Double lowering rumors

12:46 pm

Talk about a 0.50% reduction has been prevalent since the last board meeting, thanks in large part to comments made by treasurer Jim Chalmers first before the election.

National Australia Bank (NAB) is the only major bank to predict the cuts of double interest rates today, and chief economist Sally Auld said the Reserve Bank needs to take a more neutral stance quickly with its policies.

Core inflation returns to target frequency band

12:33 pm

Trim average inflation is currently at its lowest level through more than three years of quarterly reading.

Since December 2021, it is 2.9% for the year ended April 30, which is also the 2-3% target range for the RBA.

This fall to the target range is the key parts that puzzle governor Michele Bullock has repeatedly said she is waiting to see.

What did the market predict today?

12:22 pm

Market forecasts for Australian Securities Exchange Rate Indicators have been lowered over the past two weeks.

As of May 19, the indicator showed the possibility of 0.5% dropping to 3.60% at 51%.

This is the cash rate decision day

12.02pm

Welcome to our live coverage

Hello, welcome to report today’s cash interest rate decision on site.

After holding cash rates at the last meeting, the Reserve Bank of Australia was widely predicted to announce cuts later this afternoon.

The current cash rate is 4.10%.