The key points are:
The RBA cut its cash rate by 0.25% taking it to 3.6%. This is the third rate cut in this easing cycle.
The RBA sees inflation running around target but has revised its growth forecasts down again. Its forecasts assume that the cash rate will continue to “follow a gradual easing path”, implying that without further easing, growth and inflation will be lower and unemployment higher than its forecasting.
We expect the RBA to cut again in November, February and May taking the cash rate to 2.85%.
The ongoing rate cutting cycle should help underpin a modest further pick up in Australian economic growth to around 1.8% yoy by year end, but with the tariff threat posing some downside risk.