June 2026
The Reserve Bank of Australia (RBA) Board decided to leave the cash rate steady at 4.35% at its June meeting, its first pause after three consecutive hikes.
The move was in line with expectations given the heavy-handed approach by the RBA thus far this year, with the focus shifting to their August meeting.
The move gives the RBA some breathing space to monitor the impact of rate rises as their effects move through the economy.
Key changes from the May statement were as follows:
- The inflation tone in the June statement was less severe than the May statement, with an acknowledgement that oil prices have eased in recent weeks
- Less alarm regarding the conflict in the Middle East, noting that the resolution of the conflict is at an early stage but that global oil supply issues will take some time to resolve
- An acknowledgement that financial conditions are now tighter than they were and there are signs that the economy is slowing as expected
- Less forceful language used by the Board reiterating its commitment to ensuring higher inflation doesn’t become entrenched, indicating a more patient stance now
The statement noted that today’s decision was unanimous, a shift from the 8-1 majority to raise rates at the May meeting. This reflected Board cohesion around pausing.
Following the announcement, Australian government bond yields fell (prices higher), the AUD/USD rose, and Australian equities moved higher, with investors hopeful the RBA remains patient from here.
Written by Christopher Lioutas
Chairman – Harbourside Investment Management
