RBA cuts rates to 4.1%, first reduction since 2020

The Reserve Bank of Australia (RBA) has cut the cash rate by 0.25% to 4.1%, marking the first decrease in over four years as inflationary pressures ease more quickly than anticipated. This decision comes amid a backdrop of historically low unemployment and a modest recovery in the Australian dollar. While the RBA is optimistic about inflation moving towards its target range of 2-3%, it remains cautious about future economic growth and household spending. The reduction in rates is expected to provide some relief for mortgage holders and potentially stimulate the property market, driving demand and price increases. Treasurer Jim Chalmers welcomed the cut as a sign of progress on inflation and a necessary relief for many Australians. However, the RBA has signaled that further cuts will be data-dependent and has not committed to immediate future reductions.