The RBA Board acknowledged that while inflation has fallen substantially from its peak in 2022, the pace of decline has slowed recently, with inflation still above the target range of 2-3%.[1] The Board expects it will take some time before inflation is sustainably within the target range.[1]

Despite the economy showing signs of slowing, with the unemployment rate ticking up to 4% in May, the RBA Board indicated that broader data suggests continuing excess demand and elevated domestic cost pressures.[1] The Board stated that conditions in the labor market remain tighter than consistent with sustained full employment and inflation at target.[1]

RBA Governor Michele Bullock stressed that the central bank is navigating a “complex part of the cycle” and that the path of interest rates remains uncertain.[1] She noted that the June quarter consumer price inflation data, due on July 31, will be crucial in assessing the momentum of services inflation.[1]

While the RBA did not rule out further rate hikes, Governor Bullock said the Board did not discuss the possibility of a rate cut at this meeting.[1] She also expressed confidence that Australia would not experience a recession, despite global growth slowing.[1]


The decision to keep rates on hold was widely expected by economists and provides temporary relief for borrowers, who have seen their monthly mortgage repayments increase significantly since the RBA began raising rates in May 2022.[2][3]