RBA interest rates live updates: All the latest news from the Reserve Bank’s December board meeting

‘It’s been a bit fo a wild ride for me”, says Michele Bullock as she closes out the final media conference for the year.

Amen!

There was no mention in the RBA’s statement of the board “not ruling anything in or out” when it comes to the chance of another rate hike.

Ms Bullock said it was an acknowledgement that some data had softened and it had a little more confidence that “things are evolving” in line with its forecast.

The board says it has some confidence inflation is softening but the risks “have not gone away” and again said it needs to see more prgress on underlying inflation.

It said it also remains alert to a sharp rise in unemployment, hinting it spent the past two days looking at a range of scenarios in case it was missing something.

It said stopping a big lift in the jobless rate was the “balancing act”.

Governor Michele Bullock is about to front the press pack.

The RBA says it is “gaining some confidence that inflation is moving sustainably towards target”.

Markets, economists and politicians - with an election due in the next six months - have taken an increased interest in the RBA meeting after the economy recorded another weak quarterly reading last week.

Traders have brought forward rate-cut bets, taking the view a lack of growth may mean inflation pressures are dissipating and the RBA could change course.

The RBA had opted not to raise rates as high as counterparts during the 2022-23 tightening cycle in an effort to safeguard the labor market. But that decision has meant inflation has lingered longer, so while the US Federal Reserve and others have begun cutting, the RBA has remained in a holding pattern.

Economists in a Bloomberg survey last week pushed back their median forecast for a first rate cut to May from February, in contrast to markets that inched bets forward. Still, both anticipate the easing cycle is likely to be fairly shallow given Australia’s rates don’t have as far to fall to neutral, which is estimated at around 3.5 per cent .

Looking ahead, there are signs the economy has begun to pick up this quarter, led by consumer spending. The labour market also remains a bright spot. Figures due later this week are predicted to show unemployment nudged higher to 4.2 per cent in November.

The RBA’s forecast is for the jobless rate to end the year at 4.3 per cent and then peak at 4.5 per cent from late 2025.

While low unemployment is supporting demand, economists say a monetary-fiscal split is complicating the RBA’s efforts to tame inflation. Without higher government spending last quarter, Australia’s economy would have contracted and much of the recent employment gain has been driven by government hiring.

Bloomberg

Notwithstanding Australia is currently experiencing its slowest rate of economic growth since 1992, we think both inflation and employment numbers are still too high for the RBA to consider bringing forward its rate cut timeline.

That’s the view of VanEck head of investments and capital markets Russel Chesler, who said the RBA offered no surprises today.

“The reality is that the Australian economy is proving to be stubbornly resilient,” he said.

“While we are starting to see some glimmers of the property market cooling down ... we continue to have a robust labour market, low unemployment and persistent wage inflation.

“Consumer spending has also picked up, and we anticipate further inflationary pressures in the near-term.”

Compare the Market’s economic director David Koch says the Reserve Bank may have denied homeowners an early Christmas present but it shouldn’t stop borrowers from acting now.

“Give yourself an early Christmas present and find yourself a lower interest rate,” Mr Koch said.

“There’s up to a 1.15 per cent difference between advertised rates, meaning someone with a $750,000 loan could be saving $571 on their monthly repayments when they refinance from a rate of 7.24 per cent to 6.09 per cent.

“Assuming the cash rate doesn’t change until at least February, that’s a $1713 saving over the course of three months.”

Mr Koch said there were three steps to take before attempting a negotiation with the banks.

“Before you ask for a lower rate, arm yourself with information. You should know your lender’s lowest advertised rate.

“Next shop around and see what other offers are available - you might find even cheaper rates or enticing incentives like cashbacks.

“Finally, use a calculator to work out what you could be saving - knowing the money you could be clawing back is great motivation.

“You should feel empowered to negotiate. The worst thing that can happen is that your bank will tell you ‘no’ and then you’re free to move on to a different lender.”

The board’s latest statement is pretty much a carbon copy of previous decision-day releases - inflation still too high, jobs are a worry and the global outlook remains uncertain.

“Taking account of recent data, the board’s assessment is that monetary policy remains restrictive and is working as anticipated,” it said.

“Some of the upside risks to inflation appear to have eased and while the level of aggregate demand still appears to be above the economy’s supply capacity, that gap continues to close.”

We’ll find our more from govrnor Michele Bullock when she fronts the media in a hour’s time.

The RBA said a range of indicators suggest that labour market conditions remain tight.

“While those conditions have been easing gradually, some indicators have recently stabilised,” it said.

“The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.

“That said, employment grew strongly over the three months to October, the participation rate remains close to record highs, vacancies are still relatively high and average hours worked have stabilised.

“At the same time, some cyclical labour market indicators, including youth unemployment and underemployment rates, have recently declined.”

Once again, the RBA has kicked off its latest monetary statement with a note that while inflation “has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance” underlying inflation of around 3.5 per cent “is still some way from the 2.5 per cent midpoint of the inflation target”.