Economists eye more easing ahead
A vast majority of economists anticipate the Reserve Bank of Australia (RBA) will lower the cash rate on Tuesday, with many predicting further reductions before the end of the year, according to Finder’s latest RBA Cash Rate Survey.
Of the 41 experts polled, 88% expect the RBA to ease monetary policy at its upcoming meeting. Among those forecasting a cut, 94% are tipping a 25-basis-point reduction, while a small minority foresee a larger 50-basis-point drop.
Many cited falling inflation, weak GDP figures, subdued consumer spending, and ongoing global uncertainty, including repercussions from recent US tariff policies, as key reasons for a rate cut.
All four of Australia’s major banks are predicting a cash rate cut, with NAB anticipating a larger move that would lower the rate to 3.60%.
Graham Cooke (pictured above), head of consumer research at Finder, said the anticipated cut this month may be just the beginning.
“With a February cut and now one expected in May, homeowners might finally start to feel tangible relief,” he said. “Our experts are predicting several more cuts later this year, and we could be looking at a cash rate of close to 3% by Christmas.”
Cooke also advised borrowers to maintain their current repayment levels to reduce interest over time. “With any rate cut, if you can continue making the same payment each month, you will knock more off the principal and pay less interest over the long run.”
Twelve percent of those surveyed by Finder predict no change next week, with Ord Minnett’s Malcolm Wood citing labour market strength and rising wages as reasons for the RBA to stay on hold. Mark Crosby from Monash University pointed to changing US policies, saying global risks had eased as trade patterns stabilised.
Looking further ahead, over half of the experts who gave full-year forecasts (56%) expect additional cuts in July and August.
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