The Reserve Bank of Australia (RBA)'s move to cut the cash rate by 25bps in May reflects progress in inflation, a weaker domestic spending outlook, and global uncertainties, its latest meeting minutes showed. The action aimed to keep policy settings predictable amid increased volatility. While domestic data supported a rate cut, members saw no clear signs that global trade risks significantly impacted the economy. A larger 50bps cut was discussed but ruled out, as inflation had not yet returned sustainably to the target and the labor market stayed tight. Key concerns included weak productivity, ambiguity around labor market slack, and potential inflation effects from global tariffs. The RBA signaled readiness to respond if downside risks materialize. Underlying inflation is expected to remain within the 2–3% target range, though headline CPI may exceed it in early 2026 due to energy rebates. Future policy will be guided by incoming data, focusing on price stability and full employment.