RBA to Slash Rates 3 Times Before 2026 – Here’s What It Means for Your Money

Brace for impact: Australia’s central bank is priming the monetary pumps.

The Reserve Bank of Australia (RBA) will cut interest rates three times by early 2026 – a move that’ll send traders scrambling and leave savers fuming. Markets are already pricing in the dovish pivot, but the real question is whether these cuts will stimulate the economy or just inflate another asset bubble.

Rate cuts incoming – but who really wins?

When central banks turn on the liquidity taps, crypto usually moons. History shows risk assets thrive in low-rate environments, and this cycle could turbocharge Bitcoin’s march toward mainstream adoption. Meanwhile, traditional finance clings to its 0.5% yield fantasies.

Three cuts. One inevitable outcome: the great monetary debasement continues. Welcome to the era of financial repression.

RBA sticks to slow and steady plan for lowering rates

Central Banks of the UK, Canada, and New Zealand quickly lowered interest rates due to slowing growth and easing inflation, but the RBA delays action with a cautious approach. 

Officials at the July 7–8 meeting agreed that cutting rates too fast goes against their plan to ease policy slowly and steadily.

Analysts and investors expected another cut earlier this month, but the RBA kept its cash rate steady at 3.85%, which surprised markets. Because of this, economists say the bank wants to avoid influence from market expectations and instead rely on real data. 

The July meeting also confirms their observations, as officials said they want to base their actions on real economic changes and not external investor or trader pressure. 

In addition, the chief economist at Westpac and former RBA assistant governor, Luci Ellis, said that the central bank often makes rate decisions when it releases its economic forecasts. She believes the RBA will make its move in the next quarterly forecast around August.

Luci backed her timeline prediction with public data that showed Australia’s unemployment rate unexpectedly ROSE to 4.3% in June (the highest in four years) because hiring slowed across several industries. 

The Reserve Bank of Australia policymakers say the latest data doesn’t point to a sharp downturn—it aligns with what they expected. They’re using each rate cut to see how the economy reacts before making the next move.

This approach shows they care more about managing risk and keeping things stable than trying to match the faster pace of other central banks worldwide.

Rising unemployment makes a rate cut more likely soon

The Reserve Bank of Australia expected the recent rise in unemployment and still sees about 2% job growth for the year. However, the latest data suggests things may not be going as planned. Businesses are pulling back on hiring as demand weakens and uncertainty grows, making them more cautious.

While the numbers are still within the RBA’s forecast, they point to early signs that the job market is slowing down. If that trend continues, it could hit household income and slow down consumer spending.

Because of that, some economists think the RBA should lower interest rates again, but they should do it carefully. They warn against moving too fast.

Nick Stenner, an economist at Bank of America who correctly predicted the RBA’s July pause, now expects one or two more cuts over the next year. He says inflation is still easing slowly, so the RBA will likely stay cautious.

Grant Feng from Vanguard Australia shares the same outlook. He says the RBA will likely wait for clear and steady progress before making another move. Even so, markets expect three rate cuts by early 2026.

Most experts think the Reserve Bank of Australia will go at its own pace. While other countries have their central banks cutting rates to manage lower inflation and decelerating growth, Australia’s RBA is in no rush. The data suggests Australia’s economy is under pressure, but not in crisis. That allows the RBA to go slowly and not cut too soon, which could cause inflation to rise again.

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