RBA Minutes Point to More Rate Cuts as Board Weighs Data-Driven Pace

The Reserve Bank of Australia’s August meeting minutes show the board backed the 25-basis-point reduction in the cash rate to 3.60% announced earlier this month and judged the overall stance of monetary policy remains "somewhat restrictive." Board members agreed that additional cuts are likely over the coming year to ensure progress toward full employment and the inflation target. They signalled that the pace of easing will be determined meeting-by-meeting, weighing domestic indicators and global risks. Arguments were recorded for both a gradual approach—given uncertainty around spare capacity and the neutral rate—and a faster one should the labour market already be near equilibrium and inflation threaten to undershoot the midpoint of the 2-3% band. The minutes also show policymakers decided to let the RBA’s government-bond holdings decline passively as securities mature, after considering and rejecting a faster unwind. While the board said the worst outcomes from U.S. tariff policy appear to have been avoided, it cautioned that trade tensions and a potential global slowdown could tilt risks to the downside.