RBA’s Growing Confidence on Inflation Sees Jump in Rate-Cut Bets
- Traders lift pricing on February cut to almost 70% from 50%
- Money markets now see two interest-rate reductions by May
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Australia’s central bank said it’s “gaining some confidence” that inflation is moving sustainably toward target, prompting traders to boost bets on interest-rate cuts starting as early as February.
The Reserve Bank left its cash rate at 4.35% on Tuesday in a widely anticipated decision, marking more than a year at that level. The rate-setting board said “some of the upside risks to inflation appear to have eased” and scrapped a longstanding line that it wasn’t ruling anything in or out on policy.