As the Reserve Bank board met on Monday, $90 billion was wiped from the sharemarket and investors began to bet on a large pre-Christmas interest rate cut.
Markets now believe there will be an interest rate cut by the end of the year, and possibly two.The ASX200 suffered a 3.7 per cent fall on Monday, after a 2.1 per cent drop last Friday.Home buyers could be delivered a super-sized interest rate cut before Christmas to protect the domestic economy from a US-led recession after the Australian sharemarket suffered its biggest fall since the depths of the pandemic.
Markets, which until early last Wednesday put the chance of an interest rate rise this week at one-in-four, now believe there is a 12 per cent chance of a rate cut after the RBA’s meeting concludes on Tuesday. The rout on markets started after lower-than-expected non-farm payroll data in the United States, where the unemployment rate jumped in July to a three-year high of 4.3 per cent. Markets there believe the Federal Reserve will start cutting interest rates next month, starting with half a percentage point.
The Melbourne Institute’s monthly inflation measure for July, released on Monday, fell to its lowest level in 31 months, down to 2.8 per cent from 3.2 per cent. It’s the first time the institute’s inflation measure has been within the Reserve Banks 2-3 per cent target band since 2021, and well below last week’s official measure of inflation.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Super-sized rate cuts on horizon after $90 billion sharemarket routAs the Reserve Bank board met on Monday, $90 billion was wiped from the sharemarket and investors began to bet on a large pre-Christmas interest rate cut.
Read more »
Super-sized rate cuts on horizon after $90 billion sharemarket routAs the Reserve Bank board met on Monday, $90 billion was wiped from the sharemarket and investors began to bet on a large pre-Christmas interest rate cut.
Read more »
Interest rate rise looks off the agenda as Reserve Bank meetsMillions of mortgage holders will be eagerly watching what emerges from the meeting of the central bank starting today.
Read more »
Reserve Bank of Australia-Election timing no longer swings on an elusive rate cutThe government is at the mercy of the Reserve Bank. But the central bank is also subject to forces beyond its control.
Read more »
Experts tipping Reserve Bank will cut interest rates by ChristmasEconomists are predicting the cash rate to stay on hold when the RBA meets next week, but there is hope on the horizon for mortgage holders.
Read more »
Why the price of your breakfast might point to the Reserve Bank’s next decisionMuesli and milk was becoming a luxury as inflation soared. But there are good signs the nation’s inflation pressures are finally starting to abate.
Read more »