The RBA will announce its cash rate decision for December at 2.30pm. Join us for expert predictions, the announcement and commentary from economists.
RBA governor Michele Bullock. Picture: Jeremy Piper
Markets pricing in a hold with certainty
12:27pm
The latest data from the Australian Stock Exchange shows that market expectations of a 25-basis-point cut to the cash rate are sitting at just 3% as of 4 December.
The RBA Rate Indicator calculates the probability of a rate change using market-determined pricing from the ASX 30-Day Interbank Cash Rate Futures. Its readings have remained broadly unchanged since mid-November and the release of the most recent Consumer Price Index figures.
With a 97% chance of a hold decision today, borrowers can approach Christmas and the end of the year with confidence that their home loan repayments are unlikely to shift in the immediate future. Stable rates provide welcome certainty during a period when household budgets are often under extra pressure.
However, if the RBA were to raise the cash rate by 0.25%, a borrower with a $500,000 mortgage at a current rate of 5.76% would see their repayments increase by around $80 a month.
RBA prepares to wrap up a rollercoaster year
12:13pm
Today’s meeting will mark the final cash rate decision for 2025, wrapping up what has been a volatile and rapidly changing year for monetary policy both in Australia and overseas.
The RBA’s first meeting of the year in February saw a long-awaited cash rate cut, bringing an end to a four-year dry spell for relief. The rate was lowered again in May to 3.85%, before being trimmed further to 3.6% in August.
Each cut decision this year has been interspersed with a hold. Decisions have been largely in line with governor Michele Bullock’s repeated messaging that the board would look to cut gradually and sustainably to try and avoid inflation rising again.
Despite this, a pickup recorded in the September quarterly inflation data has caused all likelihood of further easing to grind to a premature halt. If the rate isn’t held at 3.6% today, markets agree it is more likely to go up than go down.
Welcome to our live coverage of the cash rate decision
12:01pm
Over the next few hours, we’ll be bringing you real-time updates, commentary and forecasts as we wait to hear whether the cash rate will stay at 3.60% or perhaps be raised for the first time in more than 12 months.
After holding steady at its last meeting in November, pressure has mounted on the Reserve Bank of Australia (RBA) thanks to sticky inflation and more resilience in the economy. The present situation is a dramatic departure from forecasts only a few months ago anticipating the bank would use its final meeting of the year to make an historic fourth cut for 2025.
However, inflation is not likely to be deemed sufficiently under control to support lower borrowing costs, meaning a hold decision is far more likely.
We will look at what that means for borrowers, savers, homeowners and the broader economy as we wait to hear from the RBA for the final time this year.
