It’s Wednesday the 9^th of July, 2025. The Reserve Bank board’s decision to not cut interest rates doesn’t preclude further reductions in coming months, Governor Michelle Bullock says, although the shock decision by the central bank yesterday has certainly fuelled uncertainty over monetary policy.

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News in brief

Prime Minister Anthony Albanese says Australia has the best deal possible with the US when it comes to tariffs, adding that the government will continue to push Washington for a zero per cent impost.

Mineral Resources’ board is rethinking plans for founder and managing director, Chris Ellison, to leave the company. The decision for Ellison to depart came after he admitted to involvement in a tax evasion scheme that helped him personally, at the expense of the company.

BHP has lost its landmark challenge to union “same job, same pay” claims for thousands of its in-house labour hire workers, in a decision the union says will cost the mining giant tens of millions of dollars a year.

Aldi has done a deal with DoorDash, launching home delivery for the first time in Australia, escalating its fight against Woolworths and Coles. The service commenced in Canberra yesterday and will be rolled out nationally in coming months.

Elon Musk’s political ambitions are doing little for Tesla’s share price with the EV maker’s prices falling more than seven per cent yesterday.

Fear-o-meter

It was a shock yesterday that the Reserve Bank didn’t cut interest rates, but in the press conference after the announcement, Governor Michelle Bullock spent plenty of time explaining that the decision was about timing, rather than direction.

She said there was a good debate within the RBA board about the need to cut rates, as demonstrated by the fact that yesterday’s deliberations resulted in a split decision. (It was the first time that the central bank has told the public that the decision wasn’t unanimous.)

While the “no rate cut” announcement was a shock, it doesn’t mean much has changed. It does demonstrate that the central bank is mostly interested in quarterly inflation figures, rather than monthly figures.

The bank can be criticised about communication of its intentions, although Ms Bullock argues: “I think communication generally has been going pretty well … but people have a different interpretation of the data.”

The bottom line – we have to wait another month before a rate cut, but there is another rate cut on the way.

Business By Numbers

The top 3 numbers to know for the week, brought to you by Xero

3.85 per cent – the official cash rate, set by the Reserve Bank, which did not change yesterday. 

10 per cent – America is set to impose a 10 per cent tariff on Aussie goods just as Prime Minister Anthony Albanese heads to Beijing.

US$26 billion – the amount of money lost by Elon Musk, in one session, on the back of Tesla’s share price tumbling after he announced he wants to form a new political party.

Who's talking today?

"It's now more likely that ...the trough [for rates] is 2.85 per cent. It's more likely that the [RBA] gets to the end of the year and say, oh crikey, actually inflation's undershot what we thought and we need to do more... We  just think the RBA is going to get a bit caught out."

Greed-o-meter

Australians might be disappointed about yesterday’s decision to not cut interest rates, and they may wish rates were lower, but relative to many other countries we already pay less for loans. In fact, since COVID, Aussie rates have tended to move less than many other countries.

Source:  The Economist, Trading Economics

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