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Hedge Clippings | 05 September 2025 Economic Growth Rebounds, but Rate Cuts Still a Waiting Game Australia's economy found some momentum in the June quarter, with GDP rising 0.6 per cent (seasonally adjusted, chain volume) to leave annual growth at 1.8 per cent. For the 2024-25 financial year, the economy expanded by 1.3 per cent, according to this week's figures from the ABS. Tom Lay, head of national accounts at the ABS, noted that "economic growth rebounded in the June quarter following subdued growth in the March quarter, which was heavily impacted by weather events." In other words, the headline numbers suggest the economy is not rolling over, but nor is it firing on all cylinders. For monetary policy watchers, the timing is tricky. With the next RBA board meeting set for 29/30th of September, there are precious few key data releases between now and then. August's monthly CPI will provide a guide, but as it still won't contain the full data set until November, it will have to wait the all-important September quarterly inflation figures, which don't arrive until the 29th of October--just days before the RBA's November meeting, which, as usual, coincides with Melbourne Cup day. That effectively leaves the RBA on the sidelines for now. While the latest GDP result offers some reassurance that growth hasn't flatlined, inflation dynamics will remain the key driver. Without the benefit of fresh quarterly CPI data, Michele Bullock and her colleagues are unlikely to cut rates in September. Market participants will therefore be circling November as the next realistic window for a move--if inflation co-operates. In short, the economy has shown a touch more resilience, but borrowers may need to sit tight a little longer before any further relief on rates from the current 3.6% materialises. By then of course things might be clearer for Jerome Powell in the US, although it's fair to say that the only guarantee there is that Donald Trump's tariffs will loom large over their inflationary outcome. As he will over the composition of the FED board itself. There's rarely a dull day in Trumpland, or for that matter, Trump's World, although this week even The Donald Show was upstaged by President Xi and his cohorts in China. Meanwhile, it looks like Albo's travel plans to the UN in New York may yet include a long-awaited, and possibly overdue, meeting with the US President - as long as Trump's not too busy preparing for his own State visit to the UK, and a weekend in Windsor. News | Insights New Funds on FundMonitors.com Manager Insights | Altor Capital Market Update | Australian Secure Capital Fund August 2025 Performance News Bennelong Australian Equities Fund |
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