By James GlynnSYDNEY--The Reserve Bank of Australia has paved the way for interest rates to potentially fall later this year by announcing downward revisions to its medium-term inflation and growth forecasts, while nudging higher its expectations for unemployment. In November, the RBA had forecast the inflation rate would be tracking at closer to 3.0% by the end of 2025. The downward revisions to the inflation outlook follow news last week of lower-than-expected core and headline inflation in the fourth quarter. "Services inflation remains high and is still expected to decline only gradually as demand moderates and growth in labor and non-labor costs ease," it added. The RBA also downgraded its forecasts for economic growth over the medium term, and revised higher its forecasts for unemployment.

Source: Wall Street Journal February 06, 2024 16:12 UTC