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The investment firm expects modest improvement in economic momentum, courtesy of higher real household incomes as inflation subsides. Furthermore, a rebounding housing market and expectations of rate cuts might also provide some support.The Reserve Bank of Australia  kept the policy rate target unchanged at 4.35% on December 10. However, the bank noted that it continues to see signs of inflation moving sustainably towards the target. That being said, Vanguard expects that RBA will remain patient and that a tight labor market is expected to keep RBA from initiating rate cuts until Q2 2025. 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