Australia’s Consumer Spending Surge May Limit RBA Rate Cuts

Australia’s private sector is showing signs of renewed growth, with second-quarter GDP figures exceeding expectations due to robust household demand. RBA Governor Michele Bullock highlighted the positive momentum, attributing it to stronger real disposable incomes and rising house prices. The Australian Bureau of Statistics is set to release July household spending data, which could further influence monetary policy.

Bullock cautioned that continued consumer spending momentum might reduce the need for additional rate cuts. The RBA recently lowered the cash rate to 3.6% but signaled a data-dependent approach ahead. Economists anticipate a pause in September, with potential cuts later in the year.

Global trade uncertainties remain a concern, though Bullock noted the worst-case scenario has yet to materialize. Markets will closely watch upcoming sentiment surveys, jobs data, and inflation figures ahead of the RBA’s next meeting.