FX.co ★ RBA Balances Price Pressures With Jobs Risk: November Minutes

In the third quarter of 2025, Australia experienced an inflation rate that exceeded initial expectations, according to minutes from the Reserve Bank's November meeting. The increase in underlying inflation was largely attributed to temporary factors; however, members of the board highlighted possible indications of more enduring pressures arising from a tighter-than-anticipated spare capacity. The labor market remained relatively constrained, with unemployment levels expected to remain stable. Although financial conditions had somewhat loosened following the 75 basis points reduction in interest rates this year, the signals remained mixed. The monetary policy was still perceived as mildly restrictive, but the board concluded there was "no need to adjust" the cash rate at this time. It was considered prudent to exercise patience while evaluating spare capacity, labor trends, and the overall policy stance. Scenarios supporting a decision to maintain current rates included stronger-than-expected demand, reduced supply capacity, or a perception that the policy had ceased to be restrictive. Conversely, should labor conditions deteriorate or economic growth falter, further easing might become necessary. The central bank continues to adopt a cautious, data-driven approach in the face of persistent uncertainty.