Australia and New Zealand: Weekly Prospects

Research evidence excerpt

Australia and New Zealand: Weekly Prospects

J P M O R G A N Economic Research

29 June 2026

Australia and New Zealand:

Weekly Prospects

• The RBA’s June meeting minutes will attract attention for the Board's Australian and New Zealand Interest

deliberations behind the unanimous decision to hold at 4.35% following three Rate Strategy

consecutive hikes. The "well placed" framing of policy in the concluding Ben K Jarman

paragraph of the policy statement is historically consistent with an on-hold (61-2) 9003-7982

baseline, though the communications challenge was a delicate one. With ben.k.jarman@jpmorgan.com

inflation running more than a full percentage point above the top of the target Tom Kennedy

band, the Board needed to justify the pause without discounting its vigilance (61-2) 9003-7981

on inflation or validating market pricing of a definitive cycle end. The tom.kennedy@jpmorgan.com

statement preserved a residual hawkish bias and upside scenarios on inflation Tom Ryan

(61-2) 9003-7632

were prominently flagged, even as the Governor argued in the press conference thomas.f.ryan@jpmorgan.com

that the probabilities were not skewed in that direction. There was also a J.P. Morgan Securities Australia Limited

refocusing away from the elevated level of 'spot' inflation and associated risks

to inflation expectations, and toward the medium-term path. This is important

as 2Q inflation is tracking well below RBA forecasts, though the degree of

medium-term cost pass-through remains unresolved. We look for further

signal on this in the minutes.

• On the activity data, the statement characterized the housing and consumption

slowdown as “expected", which served to validate the tightening path rather

than being a source of concern. Paired with the observation that demand still