July 2025: RBA price choice revealed

The Reserve Financial institution of Australia has saved the money price on maintain at 3.85 per cent, doubtless influenced by President Trump’s choice to increase his 90-day pause on “Liberation Day” tariffs till August 1.

With inflation now at 2.1 per cent and trimmed imply at 2.4 per cent, the RBA seems comfy that value pressures are beneath management, whereas the prolonged tariff pause offers extra respiration room for financial coverage selections.

The extension of Trump’s tariff pause till August 1st provides the RBA extra time to evaluate world commerce dynamics earlier than making important coverage changes.

Whereas Australia’s financial fundamentals stay sound with unemployment regular at 4.1 per cent and GDP progress of 0.2 per cent within the March quarter, the RBA seems content material to observe how the prolonged pause impacts world commerce patterns earlier than offering extra stimulus.

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Michele Bullock, Governor, Reserve Financial institution of Australia. RBA’s choice to attend suggests they need to see how world commerce tensions play out, specialists say.

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Trump tariff extension offers respiration room

The extension of Trump’s tariff pause till August 1 reduces instant stress on world commerce flows, giving central banks together with the RBA extra time to evaluate financial circumstances. Whereas Australia just isn’t a serious US buying and selling associate, the potential impression on China – our largest buying and selling associate – stays a consideration for future coverage selections.

The RBA’s choice to attend suggests they’re making the most of the prolonged pause to assemble extra financial knowledge earlier than offering extra stimulus.

With additional cuts nonetheless anticipated this 12 months, right this moment’s maintain could show to be a strategic pause that enables for extra measured coverage responses as world commerce uncertainties evolve.

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Housing market momentum continues regardless of price pause

The choice to carry charges comes as Australia’s housing market demonstrates outstanding momentum, with each main market now accelerating.

Perth’s extraordinary 1.3 per cent month-to-month progress suggests the market is once more constructing important steam, whereas Melbourne and Sydney are exhibiting renewed vigor with 0.5 per cent month-to-month progress.

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Costs nationally having risen to a median of $941,000 and models to $695,000.

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With home costs nationally having risen to a median of $941,000 and models to $695,000, the present progress trajectory of seven.0 per cent yearly for homes and 5.2 per cent for models seems sustainable regardless of right this moment’s maintain.

Markets are nonetheless pricing in three price cuts earlier than 12 months’s finish, which suggests right this moment’s pause could merely be a brief reprieve somewhat than a change in path.