Australia's central bank expects underlying inflation to fall faster than previously expected as it downgraded the economic outlook, although a still tight labour market is likely to create some lingering price pressures.

The Reserve Bank of Australia (RBA) announced a rate cut of 25 basis points, bringing the cash rate down to 4.10% on Tuesday. This move marks the first rate reduction since November 2020, signaling the bank’s concern over domestic economic uncertainties.

The RBA cut its cash rate by 25 bps to 4.10%, initiating a new easing cycle amid easing inflation. Click here to read what this means for Australian equities.