News

RBA predicts slow growth and limited interest rate cuts

RBA projects steady economic growth but no significant interest rate cuts, warning of ongoing cost-of-living challenges for Australians

Published

3 months ago

November 4, 2025

Ahron Young

RBA projects steady economic growth but no significant interest rate cuts, warning of ongoing cost-of-living challenges for Australians

In Short:
– RBA predicts persistent cost-of-living issues with low chances of interest rate cuts; economy growth expected at 2%.
– Unemployment rose to 4.5%, but is projected to remain steady; inflation is forecasted at 3.7% by next June.

RBA forecasts indicate ongoing cost-of-living struggles and a low likelihood of interest rate cuts. The Reserve Bank’s quarterly Statement on Monetary Policy (SMP) suggests Australia’s economy will grow at around 2% annually, primarily driven by housing investment.

Unemployment rose to 4.5% last month but is expected to remain steady just below this level for the next two years. Some economists challenge this optimism. Productivity is improving more quickly than anticipated but remains relatively low by historical standards.

Inflation, meanwhile, is projected to stay persistently high despite solid growth and stable unemployment. The bank highlighted that last week’s inflation figures were significantly higher than expected, with the annual consumer price rise predicted to reach 3.7% by next June. With wage growth forecasted at only 3%, workers’ purchasing power is expected to decline.

No Rate Cuts

The RBA’s lack of interest rate cut forecasts have led markets to lower their expectations. The cash rate is predicted to bottom out at 3.3% next year, a revision from earlier projections of 2.9%. Many economists believe further cuts are unlikely, with a median expectation for no cuts until late next year.

RBA governor Michele Bullock acknowledged that maintaining the current rate is possible, noting that the RBA may not need to reduce rates significantly as other central banks have.

Competitive banking conditions offer some relief to borrowers, resulting in reduced spreads on variable-rate mortgages. Nonetheless, there are concerns that these spreads could increase as banks aim for higher profitability or as market risk premiums adjust. Australian variable mortgage rates may have reached their lowest point for the foreseeable future.

News

Big Tech earnings spark investor unease over AI spending

Investors monitor Big Tech’s AI investments, with Meta thriving while Microsoft and Tesla face uncertainty over growth and returns.

Published

3 days ago

January 30, 2026

Harvey Vargas

Investors monitor Big Tech’s AI investments, with Meta thriving while Microsoft and Tesla face uncertainty over growth and returns.

Investors are reacting sharply to Big Tech earnings this week, sending a clear signal that massive spending must translate into real growth. Markets are becoming less forgiving as companies pour billions into artificial intelligence, data centres and future tech while returns remain uncertain.

Meta has delivered a standout performance, posting a 24 percent jump in revenue for the December quarter, fuelled by AI-powered advertising. The company is doubling down on its strategy, with aggressive investment in AI and infrastructure expected to drive a further 33 percent growth this quarter.

Microsoft and Tesla tell a more cautious story. Microsoft reported only modest growth in its Azure cloud business, raising questions about its exposure to OpenAI, while Tesla plans to double spending on AI and autonomous driving. Analysts warn of a widening gap between bold AI ambitions and what investors expect in returns.

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News

Federal Reserve holds interest rates amid economic uncertainty

Federal Reserve holds interest rates steady, balancing inflation and jobs, as some governors advocate for a cut. #FederalReserve #InterestRates #Economy

Published

4 days ago

January 29, 2026

Harvey Vargas

Federal Reserve holds interest rates steady, balancing inflation and jobs, as some governors advocate for a cut.

The Federal Reserve has opted to keep interest rates unchanged, marking the first pause since July. Officials are showing little urgency to resume cuts, even after previous rate reductions.

Two Fed governors opposed the decision, calling for a quarter-point cut, highlighting ongoing debates within the rate-setting committee, which includes both appointed governors and regional bank presidents.

Concerns over the job market and persistent inflation continue to weigh heavily on the Fed’s policy decisions, leaving economists and investors closely watching the next moves.

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#FederalReserve #InterestRates #Economy

News

Trump warns Iran as U.S. naval forces approach amid rising tensions

Trump urges Iran to resume nuclear talks or face stronger U.S. military response amid economic struggles and tensions rise.

Published

4 days ago

January 29, 2026

Harvey Vargas

Trump urges Iran to resume nuclear talks or face stronger U.S. military response amid economic struggles and rising tensions.

U.S. President Donald Trump has urged Iran to return to nuclear negotiations, warning that failure to do so could result in a far more severe military response. Posting on Truth Social, Trump signalled a hardening stance as tensions between Washington and Tehran continue to rise.

Trump confirmed that a U.S. naval strike group led by the USS Abraham Lincoln is moving towards Iran, as protests grow inside the country over alleged government repression.

The show of force comes amid heightened regional instability and mounting pressure on the Iranian leadership.

#Trump #Iran #USForeignPolicy