Overview

• The Reserve Bank of Australia reduced the official cash rate by 25 basis points to 3.85%, marking the second cut in three months.
• Headline inflation is at 2.4%, with trimmed mean inflation at 2.9%, both within the RBA's 2–3% target range.
• Major banks have passed the full rate cut to variable mortgage holders, saving a typical $600,000 borrower around $90 per month.
• The RBA cited global economic uncertainty, including risks from US tariffs, as a factor influencing its decision to ease monetary policy.
• The central bank's latest forecasts suggest the cash rate could fall to 3.2% by early 2026 if inflation remains stable.