Figures released on Wednesday show that core inflation, the RBA’s preferred measure, is currently at 1.4%.
However, Reserve Bank of Australia (RBA) Governor Philip Lowe says it is highly unlikely the RBA will contemplate higher interest rates until it’s confident that inflation has returned to 2-3%.
“Whether or not further monetary easing (aka further rate cuts) is needed, it is reasonable to expect an extended period of low interest rates,” he said in a speech.
“On current projections, it will be some time before inflation is comfortably back within the target range.”
The RBA will meet again on Tuesday, however it’s appearing increasingly unlikely that it will cut rates for a third consecutive month.
That’s because June quarter inflation figures released on Wednesday narrowly beat out the market’s expectations (+0.5.%) with a rise to 0.6%.
As a result, most experts are predicting that will be enough to postpone a third RBA rate cut to 0.75%, but not enough to prevent it from happening between now and the end of the year.
If you want an update on what the RBA’s latest comments on long-term low-interest rates mean for your current home loan situation, then get in touch.
We’re following the market closely and will be happy to run you through some mortgage and refinancing options.
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