Hi, user_no_name

Trade now

Deposit

Logout
Login Sign Up
EN

Language

English English (Global)

English English (EU)

English English (UK)

English English (AU)

English English (ZA)

English English (St. Vincent)

Deutsch German

Español Spanish (Latam)

Español Spanish (Spain)

Français French

Dansk Danish

Italiano Italian

Nederlands Dutch

العربية Arabic

Svenka Swedish

Tiếng việt Vietnamese

Bahasa Melayu Malay

ภาษาไทย Thai

繁體中文 Traditional Chinese

简体中文 Simplified Chinese

Tagalog Tagalog

தமிழ் Tamil

हिन्दी Hindi

Português Portuguese

Bahasa Indonesia Indonesian

한국어 Korean

English English (BVI)
Markets

Products

Forex

Shares

Commodities

Indices

Crypto

ETFs

Bonds
Trading

Trading Platforms

Web Platform

App

MT4

MT5

Trading Central

Trading Tools

CFD Trading Calculator

Forex Margin Calculator

Commodities Profit Calculator

Forex Profit Calculator

Economic Calendar

Quotes

Forex Heatmap

Trading Info

CFD Trading

CFD Asset List

Trading Conditions

Trading Hours

Expiration Dates

Upcoming Trading Holidays

Weekly Expiration Rollover

Trading Features

Depth of Market
Learn

Learn to Trade

Glossary

Education Centre

Trading Basics

Video library

News & Analysis

news

Academy

Trader's clinic

Webinars

US Nonfarm Payrolls
Promo

Reward Hub

marketsClub

Welcome Bonus

Loyal Bonus

Referral Bonus

Swap-free Accounts
Partnership

Affiliation

IB
About

About Markets.com

Why markets.com

Global Offering

Our Group

Careers

Awards and Media

Help Support

FAQ

Help Centre

Contact Support

Complaints

Data & Security

Safety Online

Cookie Disclosure

Legal Pack

Legal Documents

Language

RBA Holds Rates, Cites Persistent Inflationary Pressures

Wednesday Nov 5 2025 00:00

2 min

Table of Contents

1. RBA Holds Rates Steady Amid Inflation Concerns
1.1 Reasons for the Decision and Market Expectations
1.2 Market Reaction and Inflation Forecasts
1.3 Risks and Challenges Facing the Australian Economy
1.4 Mixed Signals in the Australian Economy
1.5 International Challenges and Trade Policy

RBA Holds Rates Steady Amid Inflation Concerns

On Tuesday, the Reserve Bank of Australia (RBA) decided to hold the cash rate at 3.6%, while simultaneously warning of persistent inflationary pressures within the economy. The central bank emphasized that future decisions would be heavily guided by incoming economic data.

Reasons for the Decision and Market Expectations

The decision followed stronger-than-expected Consumer Price Index (CPI) data and a still-tight labor market. The nine-member board unanimously agreed on the decision. Prevailing market expectations suggested the easing cycle had concluded, with the first rate cut not anticipated until May 2026, driven by concerns about rising inflation amidst abundant household cash and projected accelerating economic growth.

Market Reaction and Inflation Forecasts

Following the announcement, the Australian dollar experienced a slight dip, while the policy-sensitive three-year government bond yield fell to 3.61%. The central bank also released its quarterly macroeconomic forecasts, which indicate that core inflation is projected to rise above the upper limit of its target range (2-3%) by mid-2026, with the labor market remaining relatively stable. These forecasts are based on an assumption of one rate cut in the second quarter of next year.

Risks and Challenges Facing the Australian Economy

The RBA noted that the stronger-than-expected Q3 CPI report “suggests that underlying inflation pressures may be a bit stronger than we had previously thought.” It also drew attention to a series of recent data points that increased the likelihood that “capacity pressures in the economy are a bit stronger than we had previously assessed.”

Mixed Signals in the Australian Economy

Despite signs of recovering private demand and a cyclical improvement in the economy, concerns persist regarding a potential stagflation-like scenario. Recent data indicate a rebound in credit growth and house prices reaching record highs in October, suggesting that financial conditions are not overly restrictive. Simultaneously, the Australian manufacturing sector experienced its first contraction of the year in October, and employment numbers declined for the first time in eight months, not boding well for the unemployment rate, currently at 4.5%, its highest level since September 2021.

International Challenges and Trade Policy

Internationally, heightened uncertainty arises from the protectionist policies pursued by the previous Trump administration and escalating geopolitical tensions. RBA officials have repeatedly stated that the worst-case scenarios concerning tariffs have not materialized, with Australia securing the 10% global benchmark tax rate and many countries not retaliating against the United States.

Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Written by:

Ava Grace

RBA Holds Rates, Cites Persistent Inflationary Pressures

RBA Holds Rates Steady Amid Inflation Concerns

Reasons for the Decision and Market Expectations

Market Reaction and Inflation Forecasts

Risks and Challenges Facing the Australian Economy

Mixed Signals in the Australian Economy

International Challenges and Trade Policy

Latest news

Cookies

Strictly Necessary

Functionality Cookies

Targeting Cookies