The RBA is expected to be the last major central bank to start cutting interest rates and economists predict the cash rate will remain on hold at least until November.
The Reserve Bank of Australia is expected to be the last major central bank to start cutting interest rates and economists predict the cash rate will remain on hold at least until November.
“The RBA should start cutting interest rates in May 2024 after the March quarter consumer price index result confirms a sharp fall in headline inflation to below 3.5 per cent,” said Mr Cunneen. The gauge currently stands at 4.2 per cent, well outside the RBA’s 2.5 per cent mid-point target. The view was echoed by Su-Lin Ong at RBC, noting that “governor Bullock not ‘ruling anything in or out’ buys the RBA time and optionality depending on the data evolution”.unexpectedly fell to 3.7 per cent in February, not far off the 50-year-low of 3.5 per cent, suggesting the labour market was still tight.BetaShares’ David Bassanese said it was hard to conclude that there had been a material weakening in employment growth since the RBA last raised interest rates in November.
While none of the 39 economists believe that the next move from the RBA will be higher, they also caution that sticky inflation, a recovering economy, and a record wave of more than“The RBA easing cycle is increasingly in jeopardy,” warned Judo Bank’s Mr Hogan, saying the economy looked in “much better shape” than expected and that would push the easing cycle into 2025.
Analysts at Capital Economics, Rabobank, and Morgans Financial see a one-in-three chance of a rate increase. The majority of economists, however, say that further monetary tightening is very unlikely.
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