Reserve Bank of Australia (RBA) blindsided the nation’s economists by keeping rates at 3.85%

The Reserve Bank blindsided the nation’s economists, and no doubt disappointed millions of mortgage holders and aspiring homeowners, by keeping interest rates on hold at 3.85%

The markets had priced in a more than 90% chance of a 0.25-point rate cut, and all of the “big four” banks had also tipped a cut. Treasurer Jim Chalmers’ frustration was clear when he said it was “not the result millions of Australians were hoping for”.

Reserve Bank Governor Michele Bullock said rates were being held because the bank wants to see more indicators that inflation is still falling. Quarterly inflation figures are due at the end of the month.

Economist Stella Huangfu explains that while inflation pressures have indeed eased, the Reserve Bank is still feeling cautious.

Ongoing growth in home prices, coupled with limited housing supply, could make future decisions even less clear-cut.

Source: The Conversation - Margaret Easterbrook Business Editor

https://theconversation.com/interest-rates-are-on-hold-at-3-85-as-the-reserve-bank-opts-for-caution-over-mortgage-relief-260310?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20July%209%202025%20-%203444835090&utm_content=Latest%20from%20The%20Conversation%20for%20July%209%202025%20-%203444835090+CID_e83e92adca564e3a3b4f41ca27146450&utm_source=campaign_monitor&utm_term=Interest%20rates%20are%20on%20hold%20at%20385%20as%20the%20Reserve%20Bank%20opts%20for%20caution%20over%20mortgage%20reliefhttps://johnmenadue.com/post/2025/07/world-bank-warns-that-changes-are-coming-in-the-global-economy/?fbclid=IwQ0xDSwLWZUhjbGNrAtZlP2V4dG4DYWVtAjExAAEeqlagCxZ5uzoX09SA_2yNGeHYkCkQCzMuFl50O5hEOzdoF24tCoIpWCDomXU_aem_DnIwgWXZSv7suAcbacPvhQ