Inflation Continues to Cool as August Rate Hold Looks Increasingly Likely
Quick one on yesterday's inflation data and what it means for the next RBA call:
• Headline CPI fell to 3.8% year on year in June, down from 4.0%, the third straight monthly decline. Trimmed mean (core) held steady at 3.6%.
• Market is now pricing a 97% chance of a hold at the August meeting, according to the ASX RBA Rate Tracker, up sharply from 78% before yesterday's CPI print.
• Westpac has dropped its forecast for further hikes. All Big 4 banks now expect the RBA to hold at 4.35% at the August meeting, with the next move tipped to be a cut from mid to late 2027.
• Core inflation is the sticking point. Trimmed mean has now sat at or above 3.0% for 12 straight months, so the RBA Governor has flagged this is still a live decision, not a done deal.
• Housing remains the biggest driver, up 6.8% annually on the back of electricity (+22.4%) and new dwelling costs (+5.8%).
Here are some of the sharpest rates we’re seeing presently (subject to LVR and loan amount):
| Product | Variable | 2-Yr Fixed |
|
OO P&I |
5.89% |
6.14% |
|
OO IO |
6.19% |
6.27% |
|
Inv P&I |
6.07% |
6.29% |
|
Inv IO |
6.20% |
6.39% |
Worth considering if you're fixing or locking in a rate before August. Please feel free to reach out with any questions anytime.
James Ryan | Credit Adviser
B.A., Cert IV MFB
Australian Credit Representative Number 562584
M 0468 037 677
E jamesryan@azurafinancial.com.au
W www.azurafinancial.com.au
Disclaimer: The information provided is for general educational purposes only and does not constitute personal financial or credit advice. It does not take into account your specific personal needs, financial situation, or objectives. You should consider seeking independent professional advice before making any financial decisions
