Aussie shares hit record high amid talk of US rate cuts

The ASX has hit an all-time high on the back of increased expectations for rate cuts in the US. (Steven Saphore/AAP PHOTOS)

The local share market has closed at its highest level ever after a bigger-than-expected inflation drop in the United States firmed bets the Federal Reserve will cut interest rates in September.

The benchmark S&P/ASX200 index on Friday finished up 69.7 points, or 0.88 per cent, to 7,959.3, while the broader All Ordinaries climbed 72.7 points, or 0.89 per cent, to 8,206.1.