At its latest policy meeting, the RBA cut the official cash rate by 25 basis points to a new record low of 1.75%. So what are the implications for the equity market? Unlike most RBA rate cuts over the past two decades, this one was not due to weak demand but rather much weaker than expected inflation. Indeed, the latest estimate of growth was a healthy 3.0% and the latest labour market report showed the unemployment rate continues to trend lower. Rather, what spooked the RBA this time was a big downward surprise to inflation.