The RBA should hold its nerve — cutting now would be a mistake
Markets are begging for relief. The board's job is to ignore them until the inflation job is finished.
Diana Osei
Columnist · Markets · Wednesday 3 June 2026 · 6 min read
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Every cycle produces the same chorus: the moment growth wobbles, the calls for rate cuts begin. This time is no different — but the board should tune the noise out.
The uncomfortable truth is that services inflation remains sticky, and the labour market is still tighter than a return to target requires. Cutting into that backdrop risks a second wave.
Credibility is the central bank's only durable asset. Spend it chasing a soft landing the data hasn't earned, and you pay it back with interest later.
Hold. Let the lags do their work. The cuts will come — but on the data's timetable, not the market's.
Diana Osei
Columnist · Markets · Former portfolio manager; 15 years in markets
Diana writes a weekly column on markets, monetary policy and the politics of money.