The Reserve Bank of Australia (RBA) kept the cash rate unchanged at 3.60% in September 2025, noting that monetary policy remains “probably still a little restrictive” but that the recent easing cycle continues to transmit through financial conditions.

• The decision followed the August rate cut, with the Board judging that current settings are appropriate while awaiting further data on inflation and labor trends.

• Inflation in the September quarter is expected to come in higher than previously forecast, led by stronger outcomes in new dwellings and market services prices, and by shifts in electricity rebate timing.

• The labor market remains “a little tight,” with the unemployment rate steady at 4.2% in August and underemployment edging lower, though employment growth has slowed.

• Real disposable income has risen over the past year, supported by strong employment, real wage gains, and Stage 3 tax cuts, contributing to a modest recovery in household consumption.

• Housing credit growth has picked up, particularly among investors, while household debt-to-income ratios have stabilized after gradual declines.

• Globally, the Fed, Bank of Canada, and RBNZ have all eased policy amid softening labor markets, while inflation concerns have lifted rate expectations in the UK and euro area.

• The Board highlighted upside risks from persistent services inflation and stronger consumption, but also downside risks from weak consumer sentiment and slowing employment.

• Members reaffirmed a cautious, data-dependent stance and will continue to monitor inflation, demand, and labor developments closely before adjusting policy further.