Australia’s inflation remained steady in April, giving the Reserve Bank of Australia (RBA) room to continue easing monetary policy. Meanwhile, the Reserve Bank of New Zealand (RBNZ) cut its benchmark rate by 25 basis points to 3.25%, signaling a deeper-than-expected easing cycle driven by rising global trade tensions.


According to the Australian Bureau of Statistics, consumer prices in April rose 2.4% year-over-year — matching March’s pace and slightly above the 2.3% forecast. Core inflation measures, including the trimmed mean and an index excluding volatile components, both rose to 2.8%, but remained within the RBA’s 2–3% target range.


Despite some upward pressure from health and travel costs, overall inflation remains manageable. Goods prices rose just 0.9% year-on-year, while the labor market continues to show resilience, with steady employment growth and a jobless rate holding at 4.1%. Wage growth remains modest, reducing the risk of a wage-price spiral.


Market reaction was subdued, with the Australian dollar steady around US$0.6440 and bond futures stable, suggesting confidence that the inflation figures won’t derail the RBA’s easing trajectory. Chief economist Cherelle Murphy of EY noted that the bank is likely to maintain its dovish stance given the fading inflation risks and ongoing global policy uncertainty.


Across the Tasman, the RBNZ executed its sixth consecutive rate cut, bringing its cash rate to 3.25%. It now anticipates the rate to fall further — to 2.92% by Q4 2025 and 2.85% in early 2026 — as policymakers respond to subdued inflation and external economic shocks, including sweeping new U.S. tariffs that could hit New Zealand’s export-dependent economy.


Despite a divided vote — with one policymaker favoring a hold — the RBNZ emphasized its readiness to act to maintain medium-term price stability. The New Zealand dollar strengthened slightly to around US$0.5970, while interest-rate swaps jumped in response to the unexpected split decision.


As global risks rise, both Australia and New Zealand are leaning into rate cuts to buffer their economies. For crypto markets and digital asset investors, these policy shifts hint at a potentially more supportive macro environment, reinforcing the role of adaptive monetary strategies in navigating global volatility.


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