2025.08.2602:09:19UTC+00RBA Minutes Flag Data-Dependent Path for Rate Cuts

The pace at which Australia reduces its cash rate should be determined based on incoming data, evaluated individually at each meeting, as per the minutes from the Reserve Bank of Australia's August session. On August 12, the board unanimously decided to cut the cash rate by 25 basis points, marking this as the third reduction of the year and setting borrowing costs at their lowest level since April 2023. Policymakers observed that inflation had returned to the 2–3% target range, as the labor market showed signs of softening and overall output growth remained lackluster. The board emphasized the importance of adopting a gradual approach to easing, citing factors such as tight labor market conditions, inflation slightly above the midpoint of the target range, and early indications of a recovery in private demand. However, they also recognized scenarios that might justify more rapid cuts, including a balanced labor market or potential downturns stemming from the global economy. Amid uncertainties regarding spare capacity and the neutral rate, officials concurred on the need to remain attentive to data while prioritizing price stability and full employment.