Policymakers don’t let stubborn trimmed mean inflation get in the way of relief
Mortgage holders will be sighing in relief after the Reserve Bank of Australia (RBA) under Michele Bullock (pictured) moved forward with another interest rate cut after blindsiding the market with a pause in July.
Convening on Tuesday, the Monetary Policy Board opted to cut the cash rate by 0.25%, bringing it down to 3.6%.
The RBA has been clear in its mandate of arresting inflation by any means possible.
Although inflation trends supported a 25-basis-point cut in the lead up to today’s decision, trimmed mean inflation, the RBA’s preferred measure of inflation, has been stubbornly high.
Thankfully, the data was agreeable enough to bring rates down.
Attention now turns to the banks’ response to the rate reduction, with variable-rate borrowers anticipating a speedy pass through of the 0.25% cut.
