This is the interest rate that Australia needed. The political class has been under pressure from the RBA for some time, despite tax decision -making that contributes to the slowness to lower the rates.
Internationally Like-For-Like countries lowered the rates in 2024 when Australia did not. Time has come and many Australians will be relieved.
The decision of the RBA today to lower the interest rates with 25 basic points will be quickly passed on by banks that are not liked to be focused as heartless by politicians, just before an election.
Westpac was the first to announce that they would lower their rates, where others would certainly follow.
Lowering the cash rate of 4.35 to 4.1 percent will certainly be welcomed by mortgage holders, that is certain, but there are persistent underlying concerns.
Australians have had to contend with 13 consecutive tariff increases for now, 12 since the last elections, which has caused work to considerable difficulties.
This reduction in the official cash rate is the first reduction of more than four years, since November 2020.
The Post -Pandemic Economic Climate saw inflation rise, and to get it back close to being under control, the RBA gave the confidence to start the process of reducing rates into more manageable levels – and to help a thinning economy .
The decision of the RBA today to reduce interest rates with 25 basic points will be quickly passed on by banks that are not liked to be heartless by politicians just before an election
Most economists will tell you that there will be further cutbacks later in the year, but today's reduction will be real and only before the federal elections owe. The RBA will want to pause and see what the impact of today's reduction has on the immediate short term.
What does it mean for Anthony Albanian and Peter Dutton? Both leaders have welcomed the cut so that they seem sympathetic to mortgage holders. But the implications of today's cut go much deeper.
It is not all good news that the RBA decided to drop the cash rate. It has done this because it feels that it can make the shift in a responsible manner now that the inflation of the headline is within the 2-3 percent band where it should be.
But the underlying inflation – which extends the distorting impact of government subsidies – remains too high with more than three percent.
It is important that one of the other reasons why the RBA has fallen rates is because it is concerned about the state of the national economy. The sale of the retail trade is poor and the insolvency percentages are rising.
That is, economic growth is slow and there are global threats to act (think of the rates of Donald Trump). Families are struggling, but many companies are too.
Lowering the rates due to a slowing economy tells us that the RBA is certainly ensuring that unemployment could rise.
A slowing economy will be felt by everyone on time. Rate reductions can help improve its effects, which is also the reason why further cutbacks are expected later in the year.
But the ingrained impact of high inflation means that the costs of living does not disappear.
Anthony Albanese will hope that today's reduction helps to improve his political fortunes prior to the judgment of voters in the coming months
Albo will hope that today's reduction helps to improve its political fortunes prior to the judgment of voters in the coming months.
Dutton will hope it is too late, and voters will not forget the pain they have felt so far.
The opposition leader will also make the point on the campaign track that one cuts not to do well with 12 elevations on the Labor watch.
That is of course true, but it is also true that Labor has inherited high inflation and it was expected that the rates would go to the north steadily before the coalition lost the last elections.
Let the political spider start from both sides!
