The Australia 200 trades 29 points (0.33%) higher at 8873 as of 3.15pm  AEST.

The Australia 200 (ASX 200) has surged to a fresh record high of 8880.20 this afternoon after the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points (bp) to 3.60% and hinted at more rate cuts to come. 

RBA signals continued easing as inflation moderates

The RBA noted progress on inflation, with its updated staff forecasts suggesting that underlying inflation will continue to moderate to around the midpoint of the 2% to 3% range.

The RBA also acknowledged downside risks to growth, stating, ‘There is a risk that consumption growth is a little slower than expected, which could weigh on overall demand and lead to weaker labour market conditions.’ As a result, the RBA revised its gross domestic product (GDP) projection for December 2025 lower to 1.7% from 2.1%.

The RBA’s forecast for the unemployment rate was left unchanged at 4.3% by year’s end, although this seems slightly optimistic given that the unemployment rate is already at that level and the economy is slowing. This assumption will come under scrutiny on Thursday when the July labour force report is released.

The decision to cut rates was unanimous, and assuming inflation continues to moderate, it is expected that the cash rate will ‘follow a gradual easing path,’ reinforcing the RBA’s cautious easing bias.

Key economic releases to determine future rate cuts

Ahead of the next RBA Board meeting in seven weeks on 30 September, several key data releases will help determine whether the RBA will cut by another 25 bp to 3.35% in September or wait until November, which is the more likely scenario.

These releases include:

Second quarter (Q2) GDP on Wednesday, 3 September
Westpac consumer confidence on Wednesday, 10 September
National Australia Bank (NAB) business confidence on Wednesday, 10 September
Labour force report for August  on Thursday, 18 September
Monthly consumer price index (CPI) indicator on Wednesday, 24 September

Following the RBA decision, the Australian interest rate market is almost fully priced for additional 25 bp rate cuts in November and March 2026, which would bring the cash rate back to around 3.10%, considered near ‘neutral,’ where rates are neither restrictive nor expansionary.