👉 Background: The Reserve Bank of Australia is the central bank for Australians. While you can't bank there, it has the goal of ensuring there is “economic prosperity” and stability of our currency and employment for Australians.

👉 What happened: Over the past decade, the Reserve Bank dropped the cash rate to just 0.1%. But then, after the pandemic, it started raising the cash rate faster than your houseplants wilt after a weekend away. The cash rate jumped from 0.1% to 4.35% in just over 18 months. But now, the RBA has paused the cash rate at 4.35% for the sixth time this year.

👉 What else: While this pause seems like a non-event, it's especially interesting because the RBA has diverged from many other central banks around the world who have commenced their rate cuts to stimulate the economy.

What's the key learning?

💡The rate-cut trend is sweeping across economies, but not all are jumping on the bandwagon.

💡RBA has become one of the few central banks to not make moves yet compared to others:

• European Central Bank and the Bank of Canada cut their cash rate for the first time since 2022 last June
• Bank of England announced its first cash rate cut since March 2020
  
• Earlier this month the Central Bank of New Zealand
• And the biggest move was when the US Federal Reserve cut their rates by 0.50%

💡This year, employment rose at an annualised rate of 2.7% which is considerably higher than the long-run average of about 2%. While other central banks are dropping rates to re-stimulate their economy, the RBA is staying cautious so that we don’t compromise on “sustainable growth”.