Buying ASX 200 shares? Here's what the June inflation print means for RBA interest rates

Buying S&P/ASX 200 Index (ASX: XJO) shares and hoping those shares might get a boost from lower interest rates?

You're not alone.

But for the RBA's official interest rate to come down from the current 4.35% the central bank first needs to be confident that it has the inflation genie securely back in its bottle.

With that in mind, we take a look at Australia's June inflation print, reported by the Australian Bureau of Statistics (ABS) at 11:30am AEST.

ASX 200 lifts on inflation optimism

Investors look to be cheering the latest inflation data, with the ASX 200 gaining 0.5% over the 40 minutes following the ABS report. The benchmark Australian stock market index is up 1.2% at time of writing.

This comes after the ABS revealed that the Consumer Price Index (CPI) rose 3.8% in the 12 months to June 2026. That's down from 4.0% in the 12 months to May.

The biggest contributor to the ongoing price increases was housing, which was up 6.8%.

As for trimmed mean inflation – which takes out certain volatile items like automotive fuel and is the RBA's preferred gauge – that annual figure remained unchanged, though it fell slightly below consensus forecasts.

Rachael McCririck, ABS head of price statistics, said:

When we look through some of the bigger price movements, underlying inflation is steady at 3.6% in the 12 months to June 2026. This is the same as in the 12 months to May 2026.

The ABS also noted that the June quarterly movement for the CPI was 0.6% and for the trimmed mean was 0.8%.

What does this mean for the RBA's interest rate decision?

The RBA will announce its next interest rate decision on 11 August.

While today's easing inflation numbers now suggest ASX 200 investors can expect the central bank to hold rates steady, rather than seeing a fourth increase in 2026, analysts caution that we're unlikely to be out of the current high-rate territory any time soon.

"Trimmed mean inflation came in at 3.6% against forecasts of 3.7% and, crucially, below the RBA's own 3.8% projection from May," Josh Gilbert, lead analyst for APAC at eToro said. "That should take an August rate hike off the table and pare back expectations for further tightening later this year."

Sounding a cautionary note, Gilbert added, "Investors shouldn't confuse relief with victory, though. Core inflation at 3.6% is still a long way from the 2.5% midpoint the RBA is chasing."

As for investors buying ASX 200 shares, Gilbert concluded, "This softer print is good news; rates are unlikely to go higher, but are set to stay where they are for the foreseeable future."

The post Buying ASX 200 shares? Here's what the June inflation print means for RBA interest rates appeared first on The Motley Fool Australia.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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