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Andrew Brown

Reserve Bank to lay out reasons for not cutting rates

Mortgage holders should gain a little more understanding of interest rate decisions this week. (Lukas Coch/AAP PHOTOS)

Mortgage holders can expect to receive a little more insight into why Australia's central bank has chosen to keep interest rates on hold

The Reserve Bank on Tuesday will hand down the minutes from its latest meeting in September, where the official cash rate was kept at 3.6 per cent.

Governor Michele Bullock has not said whether the Reserve Bank will consider further rate reductions in 2025, after three cuts earlier in the year.

While economists had tipped a potential further easing of the cash rate towards the end of the year, stubborn inflation has put a dampener on further mortgage relief.

Michele Bullock (file)
There's been no word from Michele Bullock on the possibility of a further rate cut this year. (Dan Himbrechts/AAP PHOTOS)

Latest monthly inflation data shows it at 2.8 per cent, in the upper bands of the Reserve Bank's target band of two to three per cent.

Ms Bullock told a Senate estimates hearing on Friday inflation remained "sticky" particularly in areas such as the services sector.

"It's being offset by slightly lower goods inflation but services inflation is still up around three per cent," she said.

However, she said Australia's unemployment figure was at a good rate.

The comments came ahead of fresh labour force numbers for September, to be released on Thursday.

The national unemployment rate held steady at 4.2 per cent for August, according to data from the Australian Bureau of Statistics, despite employment falling by 5000 people for the month.

Staff preparing meals at a Sydney cafe (file)
Services inflation is still hovering around the three per cent mark. (James Gourley/AAP PHOTOS)

Economists have tipped the jobless rate to remain steady at 4.2 per cent in September.

The Commonwealth Bank has forecast 30,000 jobs will be added to the economy for the month,with the participation rate to increase to 66.9 per cent.

NAB senior markets economist Taylor Nugent said the unemployment data was a coin toss between either being 4.2 or 4.3 per cent for September but the figure was unlikely to sway the Reserve Bank on interest rates.

"The data is unlikely to be soft enough to make the November meeting live (for a rate cut), given our expectation for a material inflation surprise," he said.

The RBA governor is also expected to give further insights into the state of the economy during a speech to the Nomura Research Forum on Thursday in Washington.

Meanwhile, months of calm on Wall Street were shattered on Friday, with US stocks tumbling after President Donald Trump threatened to crank tariffs higher on China.

The S&P 500 sank 2.7 per cent in its worst day since April, while the Dow Jones Industrial Average dropped 878 points, or 1.9 per cent, and the Nasdaq composite fell 3.6 per cent.

Australian share futures lost 84 points, or 0.93 per cent, to 15,618.

The benchmark S&P/ASX200 fell 11.5 points on Friday, down 0.13 per cent to 8,958.3 as the broader All Ordinaries lost 12.3 points, or 0.13 per cent, to 9,264.3.

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