With inflation moderating and the RBA able to produce what it has described as a credible forecast return of inflation to target in mid-2025 at the current level of the cash rate, the Board has the ability to sit back and observe as long as this inflation forecast remains in force and/or risks around inflation do not increase.
The RBA remains committed to tightening further if required, again warning that some further tightening may be required to ensure that inflation returns to target in a reasonable timeframe, but that this will continue to depend upon the data and the evolving assessment of risks.
The persistence or otherwise of services inflation, which is still accelerating in Australia, has been behind NABâs expectation of a further final rate rise in November, along with continuing near-term resilience in the labour market. We remain concerned about services inflation printing strongly in August and the Q3 CPI as a whole, though goods prices appear to be turning out a little more favourably, while weaker Chinese growth is also likely helpful for the RBA remaining on hold camp. - NAB
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